General Motors Corp's Chinese unit had a nearly fourfold rise in 2002 profit because it sold more Buick and Sail cars in Asia's fastest-growing market.
Shanghai General Motors Co's net income surged to 2.9 billion yuan (US$350 million) last year from 749 million yuan a year earlier, Zhang Tao, a spokesman at Shanghai Automotive Co, which owns half the unit, said in an interview. Sales rose 61 percent to 18.5 billion yuan from 11.5 billion yuan.
General Motors, the world's biggest carmaker, Toyota Motor Corp and other automakers are selling more cars in the world's most populous nation, as rising incomes and easier financing allow more households and businesses to buy vehicles. General Motors' results may dispel concerns rising competition will hurt profits.
"We are very optimistic about GM's sales growth in China," said Zhou Feng, who owns 10.4 million Shanghai Auto shares at Boshi Fund Management Co in Shenzhen. "China's vehicle market will expand at least 30 percent a year in the next five to 10 years." Shanghai Auto, the publicly traded unit of Shanghai Automotive Industry Corp, China's biggest vehicle maker, said 2002 net income rose 36 percent to 1.07 billion yuan, or 0.43 yuan a share. Sales rose 30 percent to 4.8 billion yuan from 3.7 billion yuan the year before, the company said in a statement.
The number of cars sold in China will probably increase by about a quarter this year to 1.45 million units, according to the State Information Center, a Chinese government think tank. Sales of all vehicles, including cars, rose to 3.2 million vehicles last year, the planning commission said on its Web site on Jan. 13.
Production rose 38 percent to 3.3 million units.
That compares to a forecast of a 1.4-percent slump in global car sales, according to a Feb. 14 report by World Markets Research Center.
The Shanghai Automotive group owns half of General Motor's US$1.5 billion venture in China's biggest city, producing Buick and Sail passenger cars. Shanghai Auto, the publicly traded company, directly owns 20 percent of the venture.
"GM improved its performance and increased its investments in China," Philip Murtaugh, General Motors' China Chairman said in a statement.
Shanghai General Motors sold about 110,000 vehicles in China last year, from 58,000 in 2001.
One of its most popular models is the Buick Sail, a redesigned Opel Corsa that runs on a 1.6-liter engine and which sells for between 134,000 yuan (US$16,000) and 100,000 yuan each.
The venture's Buick cars, which sell for more than 300,000 yuan each, are usually used by business executives and government bureaucrats.
Shanghai General Motors may expand its annual production capacity to 175,000 vehicles using three shifts, from 100,000 units on two shifts now, Chris Gubbey, the venture's executive vice president, has said.
General Motors employs about 9,000 workers in China, in five ventures.
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