UPDATE: GM China Reaffirms Plans, Says Operations Self-Sustaining
02 Juni 2009 - 7:22AM
Dow Jones News
Fresh from its bankruptcy protection filing in the U.S., General
Motors Corp. (GM) sought Tuesday to assuage concerns in the Chinese
market as it reiterated that it plans to grow in China and its
Asian operations are financially stable.
"It is absolutely business as usual in China," said Kevin Wale,
president of GM China Group. "None of General Motor's operations
outside of the U.S. are included in the Chapter 11 filing,
including GM China, our joint ventures and our other China
operations."
Wale reiterated that GM's businesses in China are
self-sustaining and would require no funds from the parent company
in the U.S. The company's overall auto sales in China rose 9.4% in
the first four months of the year, while sales in the U.S. have
plummeted.
"Our operations are separate, they're profitable, they're
well-funded, and we generate our own funds for future investments
in our business," he said.
The auto maker's plans to double sales in China to 2 million
units and introduce 30 new or updated models over the next five
years remain unchanged, he said.
To reach that sales target, GM "will probably need to build
another plant in the next five years," Wale said.
GM's sales in China hit a record in the first five months of
this year, with sales rising 33.8% from a year earlier to 671,148
units, the company said. In May alone, GM's sales in China rose 75%
from a year earlier to a record 156,000 units.
If the strong sales trend continues, GM may raise its sales
forecast for the year, Wale said.
Chinese consumer confidence in GM may also be buoyed by a
statement of support from GM's Chinese joint venture partner, SAIC
Motor Corp. (600104.SH), Monday night.
"SAIC has the confidence and the strength to unwaveringly
support the joint ventures' healthy and stable development," said
the Shanghai-based auto maker, China's largest by sales volume.
GM will also continue to pursue a commercial vehicle partnership
with China's second-largest auto maker, China FAW Group Corp., Wale
said.
"We anticipate moving forward with that in a positive manner,"
he said.
Wale reiterated that GM China's main focus is to build vehicles
for the local market, but will likely eventually export from China.
He added, however, "I don't see that happening in the near
future."
Sales were notably stronger at GM's joint venture with SAIC and
Wuling Automobile Co.
Sales at SAIC-GM-Wuling Automobile Co. rose 49% in the first
five months of the year to 442,000 units, according to GM, which
has a 34% stake in the joint venture. Sales at passenger
auto-making joint venture Shanghai General Motors Corp. were
roughly half those of its peer, rising 12% from the same period
last year to 228,000 units.
-By Patricia Jiayi Ho and Joy C. Shaw, Dow Jones Newswires;
(8610) 6588 5848; patricia.ho@dowjones.com