Bankrupt General Motors Corp said its sales in China jumped 75 percent in May and it may raise its forecast for annual sales and build a new plant, as Asia-Pacific offers a stark contrast to its woes at home.
As part of its historic bankruptcy, the 100-year-old U.S. automaker plans to close or idle 14 U.S. plants and warehouse operations, shedding up to 20,000 workers there.
“We are safe. We are part of the new GM,” Mark Reuss, head of Australian operation GM Holden, told reporters, adding no jobs would be cut in Australia, where GM employs more than 6,000.
In contrast to the overcapacity problems in North America, GM said it would need another factory in China within five years to meet its goal of selling 2 million cars in what has become the world’s biggest auto market.
Kevin Wale, president of GM China, also said that if the “phenomenal” growth continued this month, GM may have to lift its target of expanding 2009 sales by up to 10 percent. Last month, sales surged 75 percent from a year earlier to 156,000 vehicles.
GM makes light commercial vehicles in China in a three-way tie-up with SAIC Motor and Liuzhou Wuling Automobile, and operates a separate car manufacturing venture in Shanghai with SAIC, China’s largest automaker.
GM said a day earlier its Asia-Pacific operations were financially self-sufficient, needing no help from U.S. headquarters, although financing difficulties remained in some countries such as South Korea and Thailand.
Easing some of those concerns, the head of GM Daewoo Auto & Technology said on Tuesday the South Korean unit expected to reach an agreement on financial support with state-run Korea Development Bank (KDB), its biggest creditor, within the next two to three months.
GM Daewoo CEO Michael Grimaldi added the company planned to keep annual investment steady at around 1 trillion won ($811.5 million).