General Motors Corp. expects to sell more than one million vehicles in China for the first time ever this year, chief financial officer Fritz Henderson said Wednesday.
But the company has nevertheless lost market share in the quickly growing Chinese market, he admitted.
Henderson, during a presentation to securities analysts, said Chinese demand for new vehicles is up 21 percent and should top 8.4 million units in 2007, a four-fold increase from the two million vehicles sold in 2001.
GM's own sales are up substantially again this year, he added, though the market share of the US giant, struggling against foreign competitors on its home turf, is lower.
“We're on pace for our sales in China join the million unit club,” Henderson said, calling China now GM's second most important market after the United States. “It's also profitable growth,” he said.
Henderson predicted GM's earnings from its Chinese ventures would increase from 157 million dollars to around 230 million dollars this year.
GM has stakes in several different operations in China, among them Shanghai Automotive and a joint venture with Wuling Automotive.
“We know we have more opportunity to leverage growth in Korea and China,” Henderson added.
But GM is also looking to open up additional markets for its vehicles in countries such as Taiwan, Malaysia, Thailand and India.
Henderson also said GM has restructured it operations in Australia where consumers have switched from large, rear-wheel-drive cars to more fuel-efficient models.
“We've had a pretty significant shift in Australia,” he said.
Paul Ballew, GM's general director of market analysis, also said that thanks to growth outside the US, GM worldwide is now on pace to build more vehicles this year than in any year since 1978 when it held nearly 45 percent of the US market.
But the news came in the wake of the company's announcement last week that its US sales dropped 18.5 percent in July as Asian and European firms topped US producers in US market share.
US makers GM, Ford and Chrysler ended July with just 48.1 percent of their home market.
Asian carmakers captured 44.6 percent — with Toyota Motor accounting for 17.1 percent of the market — while European brands held 7.3 percent, according to Autodata.
GM is in a tight contest with Toyota for global leadership. So far this year, Toyota holds a slight edge, according to the latest figures released by both companies.
Ballew noted the automobile industry globally has shifted away from a model focused on highly developed countries to a broader model where emerging markets will play a larger role.
New vehicles sales in 11 emerging markets around the world, including places like China, India, Russia and South Africa, will actually exceed new vehicle sales in North America, Ballew told analysts.
“Emerging markets will account for a quarter of all vehicles sold worldwide,” he said.
“We barely talked about Russia five years ago. It's an amazing change,” he said. “We now sell more cars in Russia than we do in France,” he said.
