General Motors may beat its China vehicle sales forecast of 27% growth this year as sales in the country boom and also because of the company’s revamped group structure.
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New car sales in China have gathered pace since February following the introduction of government incentives. GM now expects to exceed its forecast of 1.4m sales there this year, up from 1.1m in 2008, according to Johan Willems, vice president of GM International Operations (GMIO).
He told Reuters: “”We feel very comfortable with China and the way we work there with our joint venture partners. We have run pretty quickly in China to take advantage of the market, and we have a good footprint there. We had the best July ever in the country.”
GM’s China vehicle sales surged 78% year on year to 144,593 in July. From January to July, it sold 959,035 in the country, up 42.8%. Willems said GM currently has 13.4% of the market.
He added that GMIO, an integrated global unit replacing GM’s previous regional centres in Europe, Asia and Latin America, would oversee at least 60 to 70% of its worldwide sales.
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By GlobalData“We feel that market opportunities are changing quickly and that earlier it probably took us too much time before we were even able to make a decision. Under the new structure, one of the key themes is speed.”
In recent years, GM has overtaken Volkswagen as the biggest foreign vehicle brand in China with the help of SAIC-GM-Wuling, a three-way commercial vehicle venture between GM, Shanghai Automotive Industry Corp and Liuzhou Wuling Automobile. Wuling controls about 50% of China’s huge minivan market.
Last month, GM China chief Kevin Wale forecast total vehicle sales in China would rise to 10.5m in 2009 from 9.38m in 2008 and said GM’s sales were expected to grow by over 20% this year.
GM’s sales have been buoyed by demand for its locally manufactured minivans and pickup trucks after Beijing halved sales tax on vehicles with engines smaller than 1.6 litres and provided subsidies for buyers in rural areas early this year.
The company plans to roll out 30 new or revamped models in China between now and 2014.
Willems said: “”Today, a big majority of car sales in China are in tier-one cities like Shanghai, Shenzhen and Beijing, each with some 20m people. Fifteen other cities are in tier two in the 10m range.
“We are not even speaking about the tier-three and tier-four cities where people are just starting getting ready for a car. There is an enormous possibility. You can quickly see that in these cities, when people get to certain levels of income, the demand is there.”
