General Motors (GM) yesterday revealed its sales and market share in China for last year, showing it has overtaken Volkswagen as the top foreign auto maker in China.

 

The US auto maker's 2005 sales in China, the world's No 3 vehicle market, surged by 35.2 percent to 665,390 vehicles compared to 2004, GM said in a statement.

 

Its market share in China reached 11.2 percent last year, up 1.8 percentage points from 2004. GM started to produce cars in China in 1998.

 

Volkswagen sold more than 564,000 cars in China last year, down from 648,500 units in 2004, sources from the German car maker's China operations said yesterday.

 

Volkswagen, which runs two car ventures in China, was the market leader from 1985 to 2004.

 

However, if GM's sales exclude the local Wuling brand mini buses made by one of the US auto maker's joint ventures, Volkswagen would still be No 1 in the passenger car sector, said Yale Zhang, a Shanghai-based analyst for US auto industry consultancy CSM Worldwide Corp.

 

Sales from GM's three-way joint venture with Shanghai Automotive Industry Corp (SAIC) and Wuling Motor, in the Guangxi Zhuang Autonomous Region, climbed by 37.9 percent to 337,188 units last year. This includes 310,288 Wuling-branded mini buses, the US auto maker said.

 

The Wuling venture, 34-percent owned by GM, also makes the Chevrolet Spark mini-cars.

 

GM's other venture with SAIC, Shanghai GM, dwarfed Volkswagen's venture with SAIC as the biggest Sino-foreign venture in China last year with sales jumping by 28.7 percent to 325,429 units.

 

Shanghai GM produces vehicles under the Chevrolet, Buick and Cadillac brands, and also markets imported Cadillac and Saab vehicles.

 

Sales of Buick and Chevrolet vehicles in China exceeded 240,000 units and 100,000 units last year respectively, GM said.

 

Backed by robust sales, GM's operations in China remained profitable in 2005 for the fifth consecutive year, the company said, without providing details. China contributed an estimated 25 percent of GM's global profits in 2004.

 

Volkswagen said last year that its 2005 businesses in China would break even or be in the red due to sluggish sales and high costs.

 

"GM benefited from an unprecedented number of new and upgraded product introductions as well as a growing portfolio of brands," said Kevin Wale, president of GM China Group, in the firm's statement.

 

CSM's Zhang attributed GM's 2005 success in China largely to suitable products, a well-managed dealer network and marketing skills.

 

Benjamin Asher, from Automotive Resources Asia Ltd, a consultancy with offices in Bangkok, Shanghai and Beijing, said last year that GM was in a good position in China because it was able to source lots of cheap quality spare parts from South Korea.

 

Many of GM's products made in China, such as the Buick Excelle and Chevrolet Spark, Epica and Aveo, are redesigned models from its South Korean affiliate Daewoo.

 

"With strong performance in China, this market appears to be especially important for GM as it is losing ground to Asian rivals, led by Toyota, in its home market," said Jia Xinguang, from China Automotive Industry Consulting and Development Corp.

 

GM's vehicle sales tumbled by 4.3 percent to 4.52 million units in the United States last year, which brought its share of the world's biggest vehicle market to 26 percent from 27.3 percent in 2004.

 

Wale said GM expected China's vehicle market to grow by 10 to 15 percent in 2006 with robust demand in the small to medium-sized car segments.

 

"We have built the broadest selection of products and collection of brands of any auto maker in China. We have no intention of letting up on the accelerator," Wale said.

 

GM said it planned to roll out extra Buick, Chevrolet and Cadillac products and continue to expand its existing ventures and distribution networks in China this year.

 

(China Daily January 6, 2006)