GM's China market share exceeds VW's
(Agencies)
Updated: 2005-07-08 15:08

General Motors Corp. ended Volkswagen AG's 20-year run as the biggest overseas automaker in China, the world's third-largest vehicle market, after releasing five new Chevrolet and Cadillac models in the first six months of 2005.

Sales by GM and its three local ventures rose 19 percent in the first half to 308,722 vehicles, giving the carmaker a record 10.9 percent share of China's market.

New models, like this Chevrolet Aveo, helped GM to boost sales in China. [AP]

Volkswagen, which began making cars in China 12 years before GM, said it sold 262,198 units in the same period.

"New models, competitive pricing and appropriate marketing strategies are fueling GM's efforts to get ahead of rivals, including Volkswagen," said Yale Zhang, an analyst with CSM Asia Corp. in Shanghai.

China contributed an estimated 25 percent to GM's 2004 global profit, as the economy's 9 percent growth rate made cars affordable to more people. GM, which invested almost $2 billion in China since 1997, last year announced $3 billion of additional funds to double production in the country by 2007 while reducing output in the United States and in Europe.

The world's largest car company, which makes vehicles in 32 countries, re-badged five new models from Australia, South Korea and the United States for production in China in the first half. Volkswagen, the world's fourth-largest carmaker, released only the Caddy multipurpose vehicle in the same period.

China's car sales increased 15 percent last year, after surging 76 percent in 2003 and rising 50 percent in 2002. Customers who postponed purchases last year to hold out for discounts by competing carmakers are being drawn back to show rooms by new models, GM said.

"There's no question that this year's numbers are recovering very nicely and we expect the market to grow between 10 and 15 percent for the year," GM's China President Kevin Wale said.

GM's five new models in the first half included Chevrolet compact cars, under the Chevrolet brand, Cadillac luxury sedans and a so-called premium Buick car for business users under the Buick marque.

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