GM Lifts Sales, Market Share in China
By GORDON FAIRCLOUGH July 4, 2006 2:24 p.m.
SHANGHAI -- General Motors Corp., beset by slumping sales in its home market, said that, together with its local affiliates, it sold 47% more cars and trucks in China during the first half of 2006 than it did a year earlier.
The increase was ahead of sales growth for the booming China automotive industry as a whole, GM said Tuesday, allowing the company to boost its share of the market by nearly two percentage points to 12.5%.
China is one of GM's most important profit sources, though its Chinese revenue is only a fraction of its North American revenue. The company is struggling to reverse its decline in North America and is under pressure from activist shareholder Kirk Kerkorian to consider an alliance with Renault SA of France and its Japanese partner, Nissan Motor Co.
GM said it expects annual sales growth in China this year to top 20% as it continues to roll out new models.
"We expect vehicle sales in China to remain steady through the end of 2006 and top last year's record," said Kevin Wale, president of the GM China Group.
In the first five months of the year, China's vehicle sales rose nearly 31%, while passenger-car sales climbed more than 44%, making the country the fastest-growing major auto market in the world. National six-month figures haven't been released.
"The whole industry is going up very strongly. Demand is robust," said Kate Zhu, an auto analyst at Morgan Stanley in Hong Kong.
Still, China's auto market is also becoming increasingly competitive. Price wars have broken out as the world's major car makers and their joint-venture partners battle with each other and a growing number of local Chinese manufacturers.
GM has gained by aggressively redesigning its vehicles to satisfy local tastes. The Chinese version of the Buick LaCrosse, launched this year, for example, has a restyled exterior, fancier interior and more fuel-efficient engine than the version sold in the U.S.
Volkswagen AG said Tuesday that sales by the company and its two Chinese affiliates rose a combined 30.2% in the year's first six months, giving Volkswagen a 17.1% share of the passenger-car market.
On Monday, PSA Peugeot Citroen said its Chinese venture posted a 38% sales increase in the first half of the year.
GM said its joint venture with Shanghai Automotive Industry Corp. sold 201,901 Buicks, Chevrolets and Cadillacs from the start of January through the end of June.
The company's three-way tie-up with Shanghai Automotive and Wuling Automotive, which makes the Chevrolet Spark compact car as well as minivans and small commercial vehicles, raised sales 45.1% to 250,066 vehicles.
Shanghai Automotive recently hired the former head of GM's business in China, Phil Murtaugh, to oversee its international vehicle operations. The company, a large state-owned enterprise, said earlier this year that it would begin making a line of cars under its own brand name for sale in the domestic market and for export.
By GORDON FAIRCLOUGH July 4, 2006 2:24 p.m.
SHANGHAI -- General Motors Corp., beset by slumping sales in its home market, said that, together with its local affiliates, it sold 47% more cars and trucks in China during the first half of 2006 than it did a year earlier.
The increase was ahead of sales growth for the booming China automotive industry as a whole, GM said Tuesday, allowing the company to boost its share of the market by nearly two percentage points to 12.5%.
China is one of GM's most important profit sources, though its Chinese revenue is only a fraction of its North American revenue. The company is struggling to reverse its decline in North America and is under pressure from activist shareholder Kirk Kerkorian to consider an alliance with Renault SA of France and its Japanese partner, Nissan Motor Co.
GM said it expects annual sales growth in China this year to top 20% as it continues to roll out new models.
"We expect vehicle sales in China to remain steady through the end of 2006 and top last year's record," said Kevin Wale, president of the GM China Group.
In the first five months of the year, China's vehicle sales rose nearly 31%, while passenger-car sales climbed more than 44%, making the country the fastest-growing major auto market in the world. National six-month figures haven't been released.
"The whole industry is going up very strongly. Demand is robust," said Kate Zhu, an auto analyst at Morgan Stanley in Hong Kong.
Still, China's auto market is also becoming increasingly competitive. Price wars have broken out as the world's major car makers and their joint-venture partners battle with each other and a growing number of local Chinese manufacturers.
GM has gained by aggressively redesigning its vehicles to satisfy local tastes. The Chinese version of the Buick LaCrosse, launched this year, for example, has a restyled exterior, fancier interior and more fuel-efficient engine than the version sold in the U.S.
Volkswagen AG said Tuesday that sales by the company and its two Chinese affiliates rose a combined 30.2% in the year's first six months, giving Volkswagen a 17.1% share of the passenger-car market.
On Monday, PSA Peugeot Citroen said its Chinese venture posted a 38% sales increase in the first half of the year.
GM said its joint venture with Shanghai Automotive Industry Corp. sold 201,901 Buicks, Chevrolets and Cadillacs from the start of January through the end of June.
The company's three-way tie-up with Shanghai Automotive and Wuling Automotive, which makes the Chevrolet Spark compact car as well as minivans and small commercial vehicles, raised sales 45.1% to 250,066 vehicles.
Shanghai Automotive recently hired the former head of GM's business in China, Phil Murtaugh, to oversee its international vehicle operations. The company, a large state-owned enterprise, said earlier this year that it would begin making a line of cars under its own brand name for sale in the domestic market and for export.
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