GM Predicts Slump in Chinese Sales in 2010

General Motors’ president of China operations, Kevin Wale, expects to see a dramatic decline in sales as Beijing winds down its stimulus programs in 2010. Speaking with Reuters on Monday, Wale said the company expects next year’s sales in China to increase by 10% to 15% next year, compared to the 50% increase it has seen in 2009.

In comments made while attending the opening day of the Guangzhou Auto Show in Shanghai, Wale said, "We’ve been changing the full-year forecast every month."

The explosive growth in the Chinese auto market has been a bright spot in an otherwise dismal year for automakers, and much of that growth has been due to a number of government incentives. In addition to other measures, Beijing has aggressively cut sales taxes on small vehicles but those cuts are set to expire by the end of the year.

GM’s China vehicle sales in October more than doubled from a year earlier to 166,911. The U.S. automaker and its joint venture partners have sold a total of 1.5 million vehicles in China from January to November.

Wale also said that GM is considering whether or not it will increase its investments in India and the Association of Southeast Asian Nations (ASEAN), the 10 country association that includes Indonesia, Malaysia, the Philippines, Singapore, Thailand and five other emerging automotive markets.

Wale said, "We are looking to increase our performance in ASEAN and India as they are big markets and we don’t have a lot of share there yet. So that’s a big focus for us."

Last month, Wale predicted that Beijing will launch additional incentives in 2010 to support China’s auto industry. “We spend about a billion dollars a year [in China]. We have been for the past two years and we expect to do that as we go forward.” he said.

GM plans to launch 30 new or redesigned vehicles in China by 2014. Ten Chevrolet and Buick models are scheduled to launch later this year and in 2010.

In the first ten months of 2009, Shanghai GM and partner SAIC Motor Corporation sold 548,707 units, representing a 46.5% increase year-to-year. During that period, the company’s commercial vehicle joint venture, SAIC-GM-Wuling, increased sales by 65.9% to 891,285 units.

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