GM Pares Outlook for China Sales Worry
BEIJING -- General Motors Corp.'s Asia-Pacific president lowered his outlook for growth in China's auto market this year as weaker Chinese stocks and higher fuel prices curb demand.
Nick Reilly cut his prediction for 2008 growth in China's auto market, the world's second-largest after the U.S., to between 11% and 12%, down from the 12% to 15% growth he predicted in March.
General Motors attributed a downturn in sales in China to the Olympics, a falling stock market and higher fuel prices. Above, a Beijing dealership.
However, Mr. Reilly said vehicle sales should return to double-digit growth this month or next after a decline in August, and he expects China's auto market to maintain 10% to 15% growth after this year for the next five years.
'I'm very confident that the medium- to long-term [outlook] of the Chinese car market is still very strong,' he said.
While Mr. Reilly expects GM's China sales to grow in line with the industry's this year, next year GM may be able to exceed the industry's growth pace with two new-model launches and some updates of existing models, he said. GM is confident that it can maintain its leadership position in the market, he said. Last year, GM sold 1.03 million units, the most vehicles of any company in China.
Overall China vehicle sales fell 6.3% in August from a year earlier, marking a reversal for a market that has been a bright spot for global auto makers. Mr. Reilly said he expects those figures to bounce back soon.
Vehicle sales in the first eight months of this year rose 13.94% to 6.48 million units, according to the China Association of Automobile Manufacturers.
Mr. Reilly attributed the downturn in the auto market to consumers' focus on the Beijing Olympics in August, a sharply declining Chinese stock market and an increase in fuel prices in June, but he said 'underlying demand is still there.'
On Tuesday, GM began construction of a $250 million corporate campus in Shanghai, including a center that will study alternative fuels. |
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