GM may overtake VW as top foreign car seller
(Shenzhen Daily/Agencies)
Updated: 2006-01-09 08:39

General Motors (GM) may have unseated Volkswagen (VW) as the top foreign seller in China in 2005, outpacing its European rival as well as overall sales growth in the world’s third-largest vehicle market.

The U.S. automaker posted a 35 percent rise in China sales to 665,390 vehicles in 2005, exceeding the combined 564,300 units sold by Volkswagen’s two Chinese joint ventures.

However, an exact comparison was difficult because of differences in the way the companies report sales. GM figures include sales from a commercial vehicle joint venture that markets a local brand while VW figures do not include imports.

Analysts said a more diversified slate of vehicles had helped GM, which has been gaining on Volkswagen in China for years. The improved sales growth provides much-needed momentum for the beleaguered U.S. automaker, which has been losing market share in its home market.

“GM has a more diversified product portfolio in China,” said Jia Xinguang, chief analyst with China National Automotive Industry Consulting. “That helped to pump up sales even when market growth was slowing.”

By comparison, European carmakers have opted for more streamlined portfolios, analysts said.

They said VW’s commitment to two separate car ventures have also pushed up operational costs and made it less responsive to market needs.

Sales at its flagship joint venture with top Chinese carmaker Shanghai Automotive Industry alone fell 19 percent to 287,000 units last year, an executive at the venture said.

“VW in China is pretty much like a husband with two wives,” said analyst Zhang Xin with Guotai Junan Securities, describing the awkward situation with the two joint ventures.

Still, car sales throughout the nation have been slowing. Analysts said total sales last year were expected to have grown just 10 to 15 percent, matching the growth of 2004 but well off the doubling seen in 2003, due in part to the government’s crackdown on easy auto credit to help cool an overheating Chinese economy.