General Motors posts record sales in China despite industry slowdown

David Pierson
Money&Co.

Reporting from Beijing— 

General Motors Co. and its joint ventures in China set record sales last year in the world's largest automotive market despite a marked cool down in growth.

The company sold 2.55 million vehicles in 2011, up 8.3% from the year before, GM said Monday.

“GM stayed ahead of the competition despite a slowdown in the growth of industry demand thanks to our broad portfolio of appealing vehicles,” Kevin Wale, President and Managing Director of the GM China Group, said in a written statement.

China's auto market is expected to have slowed from a blistering 32% expansion in 2010 to around 5% last year, according to the China Association of Automobile Manufacturers. 

Inflation, tighter bank lending, higher interest rates, lifting of consumer subsidies and buying restrictions in over-crowded cities all contributed to the more modest environment.

The Detroit-based GM is the largest foreign automaker in China and targets both luxury and affordable segments with its high-end Cadillac and Buick LaCrosse and entry-level with the Baojun 630, a sedan developed for the China market priced at about $10,000.

Meanwhile, the Ford Motor Co. said Monday its sales in China in 2011 grew by 7% by reaching over half a million units.

“Ford expects sustainable growth moving forward in China," David Schoch, chairman and CEO of Ford Motor China, said in a statement. "To keep up with market demand, Ford together with its partners are currently adding four new plants in China.”

China surpassed the U.S. as the world's biggest auto market in 2009. Its importance to foreign car makers has increased every year as economic conditions at home remain unstable.