By Steven Ribet, Automotive News
Shanghai, China -- Slower growth of car sales in China will be short-lived, said Nick Reilly, president of General Motors Asia Pacific.
"Market growth has obviously slowed in the past few months, but we still think it'll be double figures for the year, probably 11 to 12 percent," he said.
Reilly spoke earlier today at the groundbreaking for GM's corporate campus in Shanghai. The site will house GM's China and Asia Pacific headquarters and a center to develop alternative energy technology for cars.
More than 5 million light vehicles were sold in China in 2007, up 21 percent from the year before. For the first six months of 2008, however, year-on-year growth slowed to 18 percent, prompting many analysts to downgrade forecasts for the year. July sales rose a mere 4 percent from July 2007.
One reason for less rapid growth was the government's 18 percent hike in gasoline prices in June, Reilly said. Other factors included this year's drop in China's stock market and the Beijing Olympics, he said.
But the combined effect would be temporary, he said: "Underlying growth is still very clear to see, not only in tier 1 cities, but also tier 2 and tier 3 cities as well. It's strong, and we would expect 10 to 15 percent each year in the medium to long term."