General Motors Corp, the world's largest auto maker, plans to invest as much as US$5 billion in China over the next five years to expand its share of the world's fastest-growing major car market.
The Detroit-based company will spend about US$1 billion a year on car and engine development, production facilities, technical and after-sales support and infrastructure, said Kevin Wale, president of GM's China unit, in an interview in Shanghai on Wednesday.
GM will sell more than one million Cadillacs, Buicks, and other models in China in 2008, a more than 150-fold increase in sales over a decade. Toyota Motor Corp and Volkswagen AG both plan to add production capacity in the country to raise their own sales, Bloomberg News said.
"Even with this US$1 billion a year, it'll still be tough to remain No. 1 in China," said Ashvin Chotai, a London-based analyst for Global Insight Inc. "With China becoming the most important strategic market in the world, it's crucial to have their investment to stay in the race."
China's annual economic growth has averaged 9.6 percent over the past five years, making cars affordable to more people. The country's total demand will rise to 9.5 million and 10 million vehicles next year, Wale said.
That compares with sales of between eight million and 8.5 million vehicles for 2007, according to the China Association of Automobile Manufacturers. The passenger car market will grow 70 percent to 9.2 million vehicles by 2012, according to Chotai.
(Shanghai Daily December 7, 2007)
