General Motors, Ford see strong China sales

/ Source: The Associated Press

General Motors and Ford said Monday their sales in China's booming car market jumped last year, a boost for the U.S. automakers that have seen demand slump in their home markets.

General Motors, the biggest American automaker, said it sold 876,747 vehicles in China last year, up 32 percent from 2005. It said sales of its flagship Buick brand grew by 24.9 percent to 304,230 units.

"Vehicle sales continued to outpace most projections as a result of unprecedented consumer demand for passenger cars," Kevin Wale, president of GM China, said in a statement.

Ford said sales of its brands — which include Ford, Lincoln, Jaguar, Land Rover and Volvo — rose 87 percent to 166,722 units. Sales of Ford-brand vehicles were up 89.3 percent at 155,404.

Foreign automakers are competing aggressively in China, where sales are expanding at double-digit annual rates and major U.S., European and Asian producers have set up factories.

Vehicle sales this year are expected to rise by 15 percent to 8 million, up from an estimated 7 million in 2006, according to the China Association of Automobile Manufacturers, an industry group.

GM says China is its biggest single national market outside the United States. It overtook Germany's Volkswagen AG as China's No. 1 automaker in 2005 and now has an estimated market share of 11.8 percent.

By contrast, the company says its U.S sales of passenger cars, pickup trucks and sport utility vehicles in December were down 13 percent from the same month of 2005.

General Motors Corp. plans to invest $3 billion in China in 2004-07 in hopes it will drive a revival for the company, which is cutting production and closing factories in its home North American market.

The automaker set up its first Chinese venture with a $750 million factory in Shanghai in 1998 and now has five joint venture assembly plants that make nearly all GM vehicles sold in the country. It also has an engine plant, an auto financing venture and is quickly expanding dealerships.

Ford is in the midst of a $1 billion expansion in China and is building new assembly and engine plants in the eastern city of Nanjing, west of Shanghai. Its two existing plants produce Mondeo and Fiesta cars and Transit commercial vans.

"The China market is a critical part in our plans in building a stronger Ford Motor Co.," the chairman and CEO of Ford China, Mei-Wei Cheng, said in a statement. "The outstanding 2006 results clearly indicated that we are on the right track to achieve that goal."

Also Monday, BMW AG's Rolls Royce said China became its third-largest market in 2006 after the United States and Britain, with sales up 60 percent. The statement did not give sales figures.

Rolls Royce is adding 200 people to the 500-strong work force at its factory in Goodwood, England, to meet demand from China for its $380,000 luxury Phantom cars.

Two Chinese automakers, Geely Automotive Holdings and Chery Automotive Co., are trying to develop into international competitors by expanding their range from economy cars and minivans to luxury sedans.

Japan's Toyota Motor Corp., on track to surpass GM as the world's No. 1 automaker in the next couple years, is well behind General Motors in China. In 2005, it had just 3.5 percent of the market. But it has set a target of 1 million sales a year by 2010.

GM says sales in China and other foreign markets surpassed U.S. sales for the first time last year, reaching 55 percent of the worldwide total of 9.2 million.

GM Chairman Rick Wagoner said in November the company would expand further in China and "invest ahead of demand," confident that robust sales growth will continue.