* GM considers adding new China plants in 2011 and after
* Capacity remains tight even as market growth moderates
* To begin to export Sail kits to South America this year
* Eyes exporting substantial amount of Sail cars from China
(Adds China's monthly car sales table for H2 of 2010)
By Fang Yan and Ken Wills
BEIJING, Feb 1 General Motors (GM.N), the top
U.S. automaker, is considering adding new plants in China in 2011
and after, a senior executive said on Tuesday, as it moves to
meet steady demand in the world's top auto market.
GM, which competes with Toyota Motor Corp (7203.T) and other
top global manufacturers, is also planning to export a
"substantial amount" of its Chevrolet Sail small cars from China
to other emerging markets in the coming years, said Terry
Johnsson, vice president of the automaker's China operations.
Global industry giants, from Bayerische Motoren Werke AG
(BMWG.DE) to Volkswagen (VOWG.DE), have racked up eye-popping
sales in China, where growing national wealth has pushed auto
sales to record highs.
But the once-simmering market is returning to a more rational
growth pattern of 10-15 percent this year after the government
scrapped most of its auto incentives at the end of 2010.
The Beijing city government's recent move to impose quotas on
new car registrations and possibly similar moves by other big
cities to tackle traffic gridlock will also apply the brakes on
Still, GM, which sold 2.35 million vehicles in China in 2010
and always aims to outpace the market, remains under tremendous
capacity pressure this year, Johnsson told Reuters in a telephone
"We sold everything we could build in 2010 and the same holds
true in 2011. We could actually sell more than we will be able to
(build) if we are not capacity constrained. We are actually short
of capacity," he said.
"The total business is going to go up by the size of a single
plant. It's not just about this year. We'll have to look about a
real rapid increase in our capacity."
Ford Motor (F.N), Nissan Motor (7201.T) and Daimler AG's
(DAIGn.DE) Mercedes-Benz among others are also ramping up
capacity in China, banking on robust demand in the smaller inland
cities, which are replacing big urban centers as the major
industry growth driver as incomes rise.
Even the super luxury brand Porsche (PSHG_p.DE) is adding 10
dealerships to its 31 shops in mainland China this year to cater
to demand in mid-tier cities, its China chief, Helmut Broeker,
was quoted as saying by Automotive News.
GM, which also makes light commercial vehicles in China with
FAW Group, sold roughly 20 percent more vehicles in the country
in January than a year earlier, mostly due to its passenger car
business, Johnsson said. [ID:nBGNSCE79A]
The automaker will release its official monthly China car
sales data on Feb 9.
China Monthly year-on-year car sales growth since June 2010
Dec Nov Oct Sept Aug July June
18.6 29.3 27.1 19.3 18.7% 13.6% 19.4%
SURGE IN CHEVY SAIL EXPORTS
In January 2010, GM rolled out the Chevrolet Sail, jointly
developed with its partner and domestic industry champion SAIC
Motor Corp (600104.SS) in China.
The first foreign brand with a price tag below 60,000 yuan
mark ($9,100) became an instant hit in the small car segment,
collecting an annual tally of 125,625 units, roughly 12 percent
of GM's overall passenger car sales in the country that year.
Perceiving a demand for quality and affordable small cars in
other emerging markets, GM exported 5,000 of the Sail models from
China in the first 10 months of last year, mostly to Chile. The
volume is estimated to jump to 20,000 units or more this year,
Johnsson said. [ID:nTOE6BK06U].
"It's a strategic decision to take advantage of a vehicle
that's hot right now and establish out channels in those markets.
If we don't feed that demand in those market places, maybe these
markets will look elsewhere," he said.
So far, GM has only exported fully assembled Sail cars from
China. It plans to start shipping components and have them
assembled in select markets in South America this year and later
in other developing countries, he added.
"We have a pretty ambitious plan on the exports side. It's
far beyond the numbers that we are looking at this year,"
"We certainly would look ahead to a time we will be looking
to exporting quite substantial amount of business from China."