GM maintains price cuts to boost share of mainland car market
General Motors, the second-largest global carmaker in the mainland, will continue to cut prices to boost sales as long as such strategy does not hurt its returns, according to Kevin Wale, chairman of GM's China unit.
Shanghai GM and its partner, Shanghai Automotive Industry Corp, cut prices 6 per cent to 10 per cent in January in a push to increase their share of the mid-priced car market.
The venture's Chevrolet Lova and Aveo models, for example, had their prices cut by 5,000 to 9,900 yuan from 80,000 and 100,000 yuan.
Analysts had said price cuts of 3 per cent to 5 per cent would continue in the mainland's vehicle market for three more years as carmakers try to expand their market shares.
Mr Wale declined to give estimates of the level of GM's future price cuts, only saying that competition would moderate this year.
'Shanghai GM respects all competitors and indeed China needs great multi-brands in the country.'
Shanghai GM's market share rose 2.4 percentage points last year to 11.8 per cent, compared with Volkswagen's 17 per cent.
The company sold 291,588 vehicles in the mainland for the first quarter, up 25 per cent from a year ago.
Shanghai GM plans to roll out six to seven new models in the country this year. The car manufacturer aims to boost its production capacity to 1.7 million units by 2010 from 900,000 units at present.
Mr Wale said in January that the company would invest US$1 billion in the mainland until 2010.
SAIC is launching its own-brand car, the Roewe 750, to compete against Shanghai GM -a move that Mr Wale said was not surprising.
GM and SAIC had good communications and there was no conflict between the two companies, Mr Wale said.