FOXNews.com - General Motors Say China Sales Jumped

General Motors Say China Sales Jumped

Monday, January 08, 2007

By JOE McDONALD, AP Business Writer

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BEIJING — General Motors said Monday its sales in China's booming car market grew by 32 percent last year, a boost for an automaker that has seen demand slump in its key North American market.

The company said it sold 876,747 vehicles in China last year, up about 208,000 units from 2005. It said sales of its flagship Buick brand grew by 24.9 percent to 304,230 units.

"Vehicle sales continued to outpace most projections as a result of unprecedented consumer demand for passenger cars," Kevin Wale, president of GM China, said in a statement.

Foreign automakers are competing aggressively for a share of China's market, where sales are expanding at double-digit annual rates and major U.S., European and Asian producers have set up factories.

On Friday, U.S. rival Ford Motor Co. said its China sales last year more than doubled to 129,790 units.

Total vehicle sales this year are expected to rise by 15 percent to 8 million, up from 7 million in 2006, according to the China Association of Automobile Manufacturers, an industry group.

GM says China is its biggest single national market outside the United States. In 2005, it overtook Germany's Volkswagen AG last year as China's No. 1 automaker, with an estimated market share of 11.8 percent.

General Motors Corp. plans to invest $3 billion in China in 2004-07 in hopes it will drive a revival for the company, which is cutting production and closing factories in its home North American market.

The automaker set up its first Chinese venture with a $750 million factory in Shanghai in 1998 and now has five joint venture assembly plants that make nearly all GM vehicles sold in the country. It also has an engine plant, an auto financing venture and is quickly expanding dealerships.

Japan's Toyota Motor Corp., on track to surpass GM as the world's No. 1 automaker in the next couple years, is well behind GM in China. In 2005, Toyota had just 3.5 percent of the market. But it has set a target of 1 million sales a year by 2010.

General Motors says sales in China and other foreign markets surpassed U.S. sales for the first time last year, reaching 55 percent of the worldwide total of 9.2 million.

GM chairman Rick Wagoner said in November the company would expand further in China and "invest ahead of demand," confident that robust sales growth will continue.