GM China sees sales up 20 pct in 2009

By Alison Lui

GUANGZHOU (Reuters) - General Motors GMGMQ.PK said on Wednesday it expects its vehicle sales in China to grow by more than 20 percent this year, as it remained hopeful of selling its struggling Hummer unit to a little-known Chinese firm.

The China sales forecast by GM's China chief Kevin Wale was up sharply from a more conservative figure he gave earlier this month, when he said the company expects more than 10 percent growth in its vehicle sales in China this year.

But the full-year growth rate would still be far less than the 38 percent growth that GM China posted in the first half of 2009, when its vehicle sales in the country rose to 814,442 units, an all-time first-half record.

"The market has got stronger than we thought. We had a very strong start to the year, so we think our growth (for 2009) will be a little over 20 percent," Wale said in an interview with Reuters TV in the south China city of Guangzhou.

He added that General Motors' bankruptcy in the United States had no impact on the company's China sales.

"It really hasn't affected us at all," Wale said. "The first half of the year has been fantastic. Strange as it may seem (the bankruptcy) has had almost no impact on us."

HOPEFUL ON HUMMER SALE

In separate developments on the global stage, two Chinese companies are also vying to purchase two of GM's underperforming units as the U.S. company restructures.

In one of those, Sichuan Tengzhong Heavy Industrial Machinery, a little-known Chinese machinery maker with no experience in the car industry, has unveiled a tentative plan to take over Hummer from GM.

Some Chinese media have reported domestic regulators may reject the deal because of Tengzhong's lack of experience in car manufacturing.

"We're hopeful it will be done. It's an issue that needs to be discussed with the Chinese government," Wale said of the Tengzhong-Hummer deal.

In the other global deal, Beijing Automotive (BAIC) is making a late bid to buy GM's Opel operation in Europe, even though the previously announced buyer, Magna (MGa.TO), has said it remains on track to reach a deal.

Wale declined to comment on that deal.

GM, whose Chinese partner is SAIC Motor Corp (600104.SS), has posted strong sales growth this year in China, its second-largest market, even as a steep global industry downturn compelled it to file for bankruptcy in June with a U.S. federal court.

GM's China operations have been buoyed by brisk demand for its locally manufactured minivans and pickup trucks, as Beijing offers tax incentives and subsidies to bolster its nascent auto industry and support the slowing economy.