GM may build new factory in China, gets environmental OK image

General Motors, the world’s biggest automaker on Friday said the Chinese authorities have approved a proposal by the automaker to build a 7 billion yuan ($1.1 billion) factory in China

The new facility will have annual production capacity of 300,000 vehicles and be located in the central city of Wuhan, the Hubei Environmental Protection Bureau said on its website.

For the moment GM’s office in Shanghai did not comment directly on the project, but the company issued a statement saying the automaker would make “sustainable plans” for expanding production capacity based on market conditions, and would share details “at a proper time.”

Sales at General Motors Co. and its China joint ventures fell 8% in January from a year earlier to 246,654 vehicles, as the Lunar New Year national holiday weighed on sales. Sales at FAW-GM–its commercial-vehicle joint venture with FAW Group–totaled 2,433 vehicles, GM said, but didn’t provide a figure for comparison.

GM, which regained its global sales crown from Toyota Motor Corp. last year, is counting on the world’s biggest vehicle market to help protect its lead as Japanese carmakers rebound from a year of natural disasters.

According to a statement by the China Association of Automobile Manufacturers (CAAM), China’s monthly sales of passenger-vehicles suffered its steepest decline in more than seven years due to a Lunar New Year holiday season hiatus that deprived dealers of a week’s worth of sales.

The slump follows Chinese government estimates that holiday sales at the nation’s main retailers and restaurants rose at their slowest pace since the 2009 financial crisis, adding to signs the world’s second-largest economy is cooling.