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GM will bump up Chevrolet's China sales

By Tian Ying and Stephen Engle (China Daily)
Updated: 2006-04-13 06:04

General Motors Corp, which had record sales in China last year, said it will boost sales of its Chevrolet-brand cars by at least 50 per cent this year in China helped by rising demand for cars with small engines.

Detroit-based GM may increase sales to 155,000 units this year from 105,000 units last year, said Dale Sullivan, the Chevrolet brand director at GM China Group. The maker of Aveo and Sail compact cars also plans to introduce one more new Chevrolet model around November this year while doubling the number of its dealers to about 200.

"We will have at least a 50 per cent increase in 2006," Sullivan said on Tuesday. "It may be even better than that depending how the market is going."

GM, Honda Motor Co and other automakers are rolling out more compact cars in China to tap rising demand for small and medium-sized vehicles that are equipped with engines between 1 and 1.6 litres. Sales of cars in the range accounted for half of the total car sales in China last year, according to China Association of Automobile Manufacturers. The Chevrolet brand accounts for about a third of GM's sales in China.

GM had US$10.6 billion in losses last year. The most profitable region of the world for the carmaker was Asia-Pacific, where it had earnings of US$524 million, driven by higher sales in China.

Automakers in China are competing for first-time buyers as rising individual incomes in the country make cars more affordable. Average wages for urban residents almost doubled over the past five years, according to government data. Per capita disposable incomes in urban areas home to two-fifths of the nation's 1.3 billion people rose 9.6 per cent in real terms last year.

The number of automobiles in China rose 21 per cent to 43 million units last year with the number of privately owned vehicles increasing 22 per cent to 2.37 million units, according to the National Bureau of Statistics.

GM, which has four manufacturing ventures in China, currently makes five Chevrolet models in China including the Spark, Sail, Lova and Aveo compact cars.

(China Daily 04/13/2006 page10)