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  Auto Industry
General Motors closes in on leader Volkswagen
[ 2005-04-21 08:34:34]
General Motors Corp. (GM), the world's top automaker, posted a tepid 8.4 percent climb in first-quarter sales in China, its second-largest market, but closed in on Volkswagen AG's lead by expanding market share.
 
GM said Tuesday it had moved 132,401 vehicles in China during the first quarter. It expanded its share of the world's third-largest auto market to 10.4 percent at the end of the period, versus 9.3 percent at the end of last year.
 
But the U.S. auto giant warned that margins in the fiercely contested Chinese market would slide as it waged an aggressive price-based war with relatively newer entrants, such as Toyota Motor Corp. or Ford Motor Co.
 
"For the year as a whole, GM expects profitability and margins to remain healthy, but a little bit lower than in years past when there's been less competition," said Chris Gubbey, executive vice president at GM's Shanghai venture.
 
Slowing sales in China have exacerbated wider problems at GM, which has hemorrhaged money in Europe for years and had warned that 2005 earnings would come in as much as 80 percent below previous forecasts because of slumping North American sales.
 
But the U.S. firm is sticking with a plan to invest over US$3 billion with Chinese partners to double capacity in the country to 1.3 million units by 2007, betting that the market would recover in the second half of this year.
 
(Shenzhen Daily)
 
 
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