shanghai GM.jpgThe China operations of General Motors, the world's biggest vehicle maker, sold more than 100,000 vehicles
in January, a psychologically important figure that shows just how
important the Chinese market has become for established vehicle
manufacturers in Asia and the west.

Shanghai GM, its joint venture with SAIC, maintained its lead
position among domestic carmakers with more than 40,500 sales in
January. Its commercial vehicle JV, SAIC-GM-Wuling, sold 61,200
vehicles.

Last year, GM and its mainland China operations sold almost 880,000 vehicles, an increase of over 32% on 2005.

The achievement is in stark contrast to GM's worldwide performance,
particularly in the US, where it is shuttering plants and laying off
workers. Indeed, GM seems destined to lose its crown in the world car
industry this year to Toyota, which unlike the US giant, is actually
growing sales.

The International Herald Tribune notes the irony of Toyota's achievement,
for the Japanese firm got its start in the 1930s by reverse engineering
cars from US carmakers GM and Ford, and then spent decades catching up
with Detroit. It would also end GM's 81-year reign over the global car
industry, and mark another step in the rise of Asian carmakers.

China seems destined to follow a similar trajectory to the Japanese.
The process starts with the Chinese assembling mass-market cars that
borrow heavily from imported technology and platforms of their JV
partners.

Then, they begin to produce more stylish designs for China's
burgeoning middle class and the dependence on western technology
reduces. Finally, as growth in China's domestic market starts to slow,
China's car industry will start to look overseas for new growth
opportunities.

China sailed past Japan to become the world's second largest vehicle market
in 2006, with sales of cars up 37% to 3.8m. Combined sales of cars,
buses and trucks rose 25% to 7.2m units. In Japan, total vehicle sales
declined slightly to 5.7m units. The US is still in the lead with 16.5m
vehicles sold in 2006, but it is also a declining market.


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