updated 1/5/2006 8:08:37 AM ET 2006-01-05T13:08:37

General Motors Corp. became China’s top-selling foreign automaker last year, surpassing Germany’s Volkswagen AG, after seeing its sales grow 35.2 percent to 665,390 vehicles, according to company figures released Thursday.

South Korea’s Hyundai and Japan’s Honda also reported strong growth, while Volkswagen, the former market leader, saw its sales decline in 2005.

GM, which is looking to growth in China to make up for its shrinking market share in the U.S., said sales were driven by the continuing popularity of its Buick brand, led by the Excelle sedan and hatchback. It sold 105,000 of those two models through September, according to the China Auto Industry Association, although GM gave no figures for the entire year.

Sales of the Buick GL8 luxury passenger van also recorded steady growth, while newly introduced Chevrolet and Cadillac models also did well.

The sales growth gives GM, the world’s largest automaker, about 11.2 percent of the Chinese market, up from 9.4 percent in 2003, the company said.

Nearly all GM cars sold in China are made domestically.

The company has opened a second plant in Shanghai last year and added three new Chevrolet models in 2005, the Sail compact car, Epica intermediate sedan and Aveo hatchback. That pushed China sales for the brand past the 100,000 mark for the first time, establishing China as Chevrolet’s fourth-largest global market.

“We have no intention of letting up on the accelerator,” Kevin Wale, president and managing director of the GM China Group, was quoted as saying in the release.

Volkswagen, which once had more than half of China’s car market, said overall sales declined for the second straight year, falling about 15 percent to 564,306.

Annual sales at its flagship Shanghai joint venture fell 19 percent to 287,000 vehicles, said a company official speaking on condition of anonymity. Its other joint venture, China Volkswagen Automotive, saw sales edge up just 3.2 percent to 277,306 units from 268,000 in 2004.

VW has seen its market share drop sharply from over 50 percent in the 1990s. Hoping to regain lost ground, it has slashed prices and announced plans to introduce up to 12 new models in China by 2009 while cutting costs and improving service.

Hyundai sales accelerate
Hyundai Motor Co., meanwhile, reported annual sales of 233,668 cars produced by its Beijing Hyundai Motor joint venture, up 62 percent from 2004, spokesman Sun Zhenjie said.

Growth came mostly from its Elantra model, the mainstay of Beijing’s taxi fleet and the mainland’s second best selling sedan after China’s own Xiali.

The Korean company aims to boost production and sales by about 30 percent in 2006 to 300,000 units, Sun said. Targets call for China production capacity of 600,000 units by 2008.

Japanese carmaker Honda Motor Co. reported a 19.1 percent rise in sales to 255,500 units in 2005, public relations manager Masaya Nagai said. Production in China last year rose 24.4 percent to 266,500 units, he said.

The company aims to raise sales 38 percent this year to 353,000 cars and boost production 41 percent to 375,000 units, Nagai said.

Meanwhile, GM’s flagship joint venture in Shanghai, Shanghai General Motors Corp., sold 325,429 vehicles, up 28.7 percent from the previous year, the company said in a news release.

Minivans and small trucks sold under the Wuling brand — made at the GM’s joint venture in southwestern China, SAIC-GM-Wuling Automobile Co. — benefited from strong sales in rural China and cities in the relatively poorer interior, it said. That joint venture sold 337,188 units, up 43.4 percent from 2004.

“GM benefited from an unprecedented number of new and upgraded product introductions as well as a growing portfolio of brands,” said Wale.

New models under the Buick, Chevrolet and Cadillac brands will be introduced this year to keep up with what Wale predicted would be 10 and 15 percent growth in the Chinese vehicle market.

GM gave no figures for profits in its China operations.

But in July-September quarter, GM earned $176 million in Asia while losing $1.6 billion in North America. In 2004, GM sold 4.7 million cars and trucks in the U.S. and 4.3 million elsewhere.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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