GM ’09 China sales may top 1.6 mln units image

General Motors Co.’s sales in China this year will likely exceed 1.6 million units, Kevin Wale, president and managing director of GM China Group, said Wednesday.

The forecast represents an increase of about 47% from last year, when GM’s total vehicle sales in China rose 6.1% to 1.09 million units. GM in September forecast its sales growth would exceed 40% this year.

GM sold 1.29 million units in China in the January-September period this year, an increase of 55.6% from the same period last year. GM counts sales of Wuling commercial vans, produced by a joint venture in which GM owns a third, as part of its overall sales.

By comparison, Toyota Motor Corp.’s sales in China have suffered this year after a crucial failure to anticipate the demand for smaller cars. The Japanese auto maker’s China sales in the January-August period rose 9% from a year earlier to 415,000 units. Toyota has said it seeks to raise its 2009 sales in China slightly from 2008 levels, when its sales rose 17% to 585,000 units.

Auto makers in China have benefited from Beijing’s policies to boost sales, including tax incentives for purchases of vehicles with engines of 1.6 liters or smaller, and subsidies to encourage sales of some autos in rural areas. Both policies are set to expire at the end of the year.

GM’s sales performance in China could prove especially vulnerable to changes in government policy, as all of the vehicles sold at its Wuling joint venture with SAIC Motor Corp. and Wuling Automobile Co. qualify for the small engine tax cut. Sales at the venture account for more than 60% of GM’s volume in China in the January-September period.

Wale said he is confident the Chinese government will take appropriate actions next year to maintain stability in the country’s auto market, which is on track to overtake the U.S. as the world’s largest auto market this year.

Wale also said demand from smaller cities “should ensure some growth momentum.”

GM aims to increase its sales volume in China next year at a slightly faster rate than that of the overall auto industry, he said.