Both GM and VW, the largest foreign car makers in China, expect sales in the region to reach 3 million vehicles as competition heats up for the second year.
Bob Socia, head of GM China operations, said that the automaker is ‘cautiously optimistic’ and said sales will reach 3 million units only if market fundamentals are strong, while VW said that the company that its sales might even that target. Both VW and GM sold around 2.8 million vehicles in China last year. Competition heats up in China as analysts predict it will become the largest market this year with sales of more than 20 million units.
“In terms of their presence, GM may be in a better position with their strong network and a more complete product portfolio,” said Bill Russo, president of automotive consultancy Synergistics. Still, most carmakers “are probably anticipating market expansion to be not as robust as it has been in the past, and the supply-and-demand imbalance is creating additional pressure on pricing,”
VW might have a slight disadvantage as its sales in its home market continue to drop and the company’s image was affected by the recall in China on defective gearboxes. Therefore VW plans to quickly expand in the country increasing its lineup by 29% to 90 models in the next three years. The company will invest $12.8 billion and increase capacity with 60% by 2018. GM, which came with a record 53 vehicles at the Shanghai show, will invest $11 billion by 2016.
Source: Automotive News Europe