GM China sales up 20% in January

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Shanghai GM staff are probably going home content this Chinese New Year after learning that Shanghai-GM sales are up 20% over January 2010 (In January 2010 sales were up 137%). GM sold over 200,000 vehicles in January even after it was estimated that sales would fall flat due to government incentives being canceled and also Beijing government restricting car sales, it seems to be Chinese New Year sales that are dragging sales up at the moment, but how will the picture look in February and March 2011?

Reuters reports:

General Motors (GM.N), the largest overseas automaker in China, sold roughly 20 percent more vehicles in the country in January from a year earlier, a senior executive said on Friday.

“Even though the December numbers were really high because of the big push before the incentives disappeared, January is still running at an incredible level,” Terry Johnsson, vice president for GM’s China operations, told Reuters in a phone interview.

GM, which operates auto ventures in China with state auto groups SAIC Motor Corp (600104.SS) and FAW Group, sold 219,192 vehicles in the country in January 2010.

It will release its January sales tally after the week-long Lunar New Year holiday in February.

Beijing unveiled tax incentives in 2009 for cars with engine sizes of 1.6 litres or smaller, a move that helped China surpass the United States as the world’s largest auto market that year.

The incentives were scaled back in 2010 and were scrapped from Jan. 1.

As such, sales of small cars — which make up roughly 60 percent of the country’s passenger car sales in 2010 — will decline this year, biting into the overall volume, analysts said.

The Beijing city government’s initiatives to impose quotas on new car registrations and possibly similar moves by other big cities to tackle traffic gridlock will also apply the brakes on the once simmering market, they added.

Many industry veterans, including Kevin Wale, president and managing director of GM’s China operations, expect the country’s auto market to grow 10 to 15 percent this year.

GM, Wale had said, aimed to grow faster than the market for the full year.