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GM to st through conduit gate valve ay investing in China despite cash woes
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GM to stay investing in China despite cash woesPublished: 01 Dec 2008 17:57:53 PST

GENERAL Motors Corp, which is under cash flow pressure, will stay as a solid investment in China and continue with new plans to maintain sustained growth in the world’s second-largest car market.

Ding Lei, general manager of GM’s flagship venture in China, said although GM is shedding brands and closing plants to boost liquidity in the US market, business in Latin America and Asia remains healthy.

“There won’t be changes in GM’s investment in China,” said Ding from Shanghai General Motors Co Ltd, “The Chinese market will be the top priority for future development.”

Overseas car makers are still investing in emerging markets like China to help offset slackening demand in traditional markets in Europe, the US and Japan.

Although the stocks slump and a slowing economy in China is also hitting demand for vehicles, the 11-percent sales increase for the first 10 months remains one of the world’s fastest.

Ding expects the car maker will be able to get through the tough times with government support as the US car industry, with annual sales of 15 million units, plays a crucial role in the US economy.

In China, GM is also facing challenges with declining market share and sluggish sales despite new models like the Buick Excelle and the Chevrolet Aveo compact car.

Shanghai GM yesterday launched a revamped Buick Regal mid-class sedan in Shenzhen, as part of its efforts to upgrade products to win back Chinese customers who have been buying more cars from Volkswagen and Toyota.

Next year, the Chevrolet Cruze mid-class sedan will also begin domestic sales ahead of another 10 new models for the Asia-Pacific region by 2010, according to Ding.

The car maker is also boosting the production capacity of its plant in Shenyang to 150,000 units every year.

Ding believes China’s car sales will not post a year-on-year decline for the coming year because a 4-trillion-yuan (US$586 billion) investment being offered by the government will help rebuild market confidence and will boost domestic consumption.