GM Forecasts 2 Million Car Sales in China This Year

GM believes that it will sell 2 million vehicles in the Chinese car market this year. The head of the car company's Chinese unit told Bloombergthat the figure is well ahead of its previous forecasts. Last year, the No.1 U.S. carmaker sold 1.83 million units in China, up 67% from 2008. Volkswagen and GM are the two largest foreign car companies in that country. With its plans to introduce more than 10 new models in China, GM may be able to pull decisively ahead of VW in 2010.The GM numbers mark the clear division between the haves and have nots among foreign car companies in the world's most populous nation. Firms that operate joint ventures with China's largest car companies have a substantial advantage when they need to increase manufacturing and marketing, and GM's partnership with Chinese firm SAIC puts it in this category.

Ford (F) sold only a little over 440,000 cars in China last year. By contrast, Chrysler and Toyota (TM) aren't in the top tier of Chinese sales. GM got into China in the early part of the last century: Its Buick nameplate has long been a brand sales leader on the mainland, and it still is.

China's local car firms are becoming more aggressive selling their own brands, aided by the fact that their quality and styling have improved, based to some extent on what they've learned from foreign corporations like GM. The competition from these Chinese firms is likely to make holding market share harder for the foreigners.

That may be bad news for GM, but it's worse news for those rivals that are still trying to get a significant foothold in the Chinese market.
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