GM CEO: China Is Our New 'Crown Jewel'
BEIJING (AP) — China will play a much bigger role in General Motors Co.'s plans including clean energy vehicles as it moves to capitalize further on rapid growth in the world's largest auto market, the company's CEO said Tuesday.
Calling China "the crown jewel in the GM universe," Chief Executive Daniel Akerson said the automaker plans to launch more than 20 new or redesigned cars in China over the next two years.
"China is central to our global strategy," he said at a news conference. "We want to understand the preferences that the China market wants. We bring our best designs, best technology to China."
GM sold more cars and trucks in China last year than it did in the U.S. for the first time in the company's 102-year history. An expansion of sales into provincial cities helped the company sell 2.35 million vehicles in China in 2010, up 29 percent from the previous year.
China has become important to almost all of the world's vehicle makers, with sales expanding by a third last year to exceed 18 million vehicles while sales of passenger cars also rose by a third, to 13.7 million vehicles.
It has been particularly important as a source of earnings for GM, which has been through a dramatic turnaround since 2009, when it was rescued from collapse by a $50 billion government bailout and filed for bankruptcy protection.
"China is a unique market sitting in what I think is probably the highest growth area in the next 10, 20, 30 years in Asia," Akerson said.
GM estimates its market share in China at 14.7 percent and expects it to increase. The automaker's sales in January hit a monthly record high of 268,071 vehicles — up 22.3 percent from a year earlier.
Akerson, who was appointed CEO in August just before the company's historic initial public offering which reduced the level of government ownership following the bailout, is on his second visit to China.
He said GM plans to do more of its research and development as well as its engineering and design work, now largely centered in the U.S., in China.
In particular, the company's advanced research center in Shanghai will focus on new energy vehicles and batteries, he said. GM recently unveiled its electric vehicle, the Chevrolet Volt.
Akerson said the company learned painful but worthwhile lessons from its taxpayer funded bailout: chiefly to make sure it doesn't accrue debt.
"The old GM was burdened with so much debt, they had to cut back on funding of new product, new research and development during the down cycle because they had such a heavy debt load. We're not going to make that mistake again," he said.
The automaker's surging car sales in China have helped with the corporate rebound. GM's global sales grew 12 percent last year and it turned a $4.2 billion profit in the first nine months of 2010.
Akerson predicted that the final quarter's results, which have yet to be released, will continue to show a "solid and profitable" year.