Business

GM and Volkswagen Announce Investments in China

Beijing, China – Automakers General Motors and Volkswagen both announced yesterday, major investments in China.

General Motors Co. will open 600 Chinese dealerships this year,  and will double its production, despite a slowdown in sales. Volkswagen, meanwhile, has signed an agreement worth 224 million.

The chairman of the board of GM, Dan Akerson, said the U.S. giant will have about 3,500 dealerships in China by the end of the year, against 2900 currently. GM also has double its Chinese production to five million cars by 2016, compared with an annual production of 2.55 million cars and trucks currently. In addition, GM said that its luxury car division will launch a new Cadillac model year in the Chinese market, hoping to boost its annual sales of 30,000 last year to 100,000 by 2016. These cars will be built in China, but Mr. Akerson did not provide details.

China is the largest automobile market in the world in terms of vehicles sold, but sales growth has increased from 35% in 2010 to only 2% in the last quarter. Demand was dampened by government measures implemented to cool the overheating economy.

China nevertheless remains the largest market in terms of sales for Volkswagen. The German company – which also owns brands including Skoda, Audi and Bentley – has sold 2.26 million vehicles last year. Its sales reached 633,000 vehicles in the first quarter, up 15.6% year over year.

 

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