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General Motors record sales in China’s booming car market

Monday, October 12th 2009 - 10:47 UTC
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The iconic Hummer was also sold to a Chinese company The iconic Hummer was also sold to a Chinese company

General Motors and affiliate companies in China sold almost 1.3 million cars in the first nine months of 2009, with September a record month, according to a release from the main offices in Detroit.

In September sales numbers soared to 181.148 while in the nine months they reached 1.292.549 units, which represents 55.6% over the same period last year, thus “establishing a new record for the period”

However in the US, where GM is in the midst of a major re-structuring of the company following the financial collapse of the company, September sales were down 45% compared to a year ago, following a 20% drop in August.

“Sales continue to surpass forecasts as nearly all market segments experience growth,“ said Kevin Wale, president and managing director for GM's China operations.

Wale, who said first-time car buyers in China's smaller cities were a major driving force behind surging sales, has forecast a more than 40% surge in GM's vehicle sales in the country in 2009.

China's auto market, which overtook the United States as the world's largest in January, has been a leading bright spot in the struggling global auto industry as government incentives spurred a pick-up in demand.

GM has been among the major beneficiaries of the initiatives, with its China vehicle sales hitting monthly records since January.

In related news it was announced GM has agreed to sell its iconic Hummer brand to Chinese firm Sichuan Tengzhong Heavy Industrial Machinery for an undisclosed fee. The two parties had been in talks about the sale for a number of months.

Under the terms of the Hummer deal, Tengzhong will take an 80% stake in the company, with the remaining 20% going to Hong Kong entrepreneur Suolong Duoji.

The current Hummer management team will continue to run the company.

”Hummer is a strong global niche brand and this agreement signifies another important milestone in writing the next chapter of both GM and Hummer,“ said GM boss Fritz Henderson.

The company also said it would be focusing on improving efficiency, including the introduction of diesel engines.

”We are excited about some of the initiatives already underway at Hummer that we believe our investment will be able to accelerate, particularly related to the creation of the next generation of more fuel efficient vehicles to meet not only future regulations but also customer expectations,” said Yang Yi, chief executive of Tengzhong.

Hummers were originally built as military off-road vehicles by a company called AM General. The brand took off as US motorists flocked to the sport utility vehicles favoured by celebrities including Arnold Schwarzenegger.

GM bought the Hummer brand in 1999, but sales have suffered recently as the gas-guzzling performance and military image have become less popular. Hummers weigh up to five tons and have fuel consumption of around 15 miles per gallon.

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