Sunday, November 23, 2008

GM sees flat China sales next 6-9 months

By Dana Ford

LIMA (Reuters) - General Motors Corp said on Friday it expects sales in China to be flat for the next nine months, as the worldwide economic crisis hits the company in its largest market outside of the United States.

The U.S.-based automotive maker, whose share price tumbled to its lowest level in 66 years this week, had been depending on China as one of its fastest growth markets.

"For China, we're expecting a relatively flat market -- so no up, no down -- for probably another six to nine months maximum, and then back to the more natural growth that we see longer term of 10 to 15 percent," Nick Reilly, GM's Asia Pacific president, told Reuters at a meeting of leaders from 21 Pacific Rim economies at the APEC summit in Lima.

"The growth is probably going to be somewhere around 10 percent for the industry, and I would hope we can grow a little bit more than that with those new entries," he said.

GM is planning to roll out five new cars in China in the next 12 months. Because of the new products and China's general economic boom, Reilly remained upbeat about the company's long-term growth in the Asian country.

He said GM would likely sell between 1 million and 1.2 million vehicles in China next year, up from 1 million sold in 2008.

Elsewhere in Asia, Reilly said GM plans to spend about $1.5 billion each year, for the next two to three years, investing in places like India, where the company hopes to double its market share in the next three to four years. It currently has about 4 percent of the Indian market.

GM is working to up its growth throughout the Asia Pacific, but is obviously aware of the extremely tight economic environment.

"Robust growth is going to start again when consumer confidence comes back and that is, I think, fairly closely linked with the stock market," said Reilly.

GM shares were off almost 7 percent on Friday at $2.68.

(Reporting by Dana Ford; Editing by Fiona Ortiz, Lisa Von Ahn and Matthew Lewis)

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