GM adds dealerships in China

BEIJING — General Motors Co. chairman Dan Akerson said Monday that the automaker plans to open 600 dealerships in China this year, and nearly double production capacity despite a slowdown in sales growth.

China is the world’s biggest auto market by vehicles sold but sales growth slowed from 35 percent in 2010 to just 2 percent in the latest quarter. Demand has been blunted by government credit and investment controls aimed at slowing an overheated economy.

“We fundamentally believe in the strength of the Chinese market,” Akerson said during the Beijing auto show.

GM will expand its dealership network from 2,900 last year to 3,500 by the end of this year, Akerson said.

GM also plans to increase its production capacity in China to 5 million cars a year by 2016, Akerson said. That would be nearly double the 2.55 million cars and trucks GM and its Chinese partners sold in China last year.

The company’s luxury Cadillac unit plans to introduce one new model a year in China, said Joseph Liu, executive vice president of GM China. He said the unit hopes to raise annual sales from 30,000 last year to 100,000 by 2016.

Asked by a reporter whether GM would set up a dedicated factory to produce Cadillacs in China instead of importing them, Akerson said, “yes,” but gave no details.

GM expects to complete a deal to restructure its venture with its main Chinese partner and restore a 50-50 shareholding balance “in the near term,” Akerson said.

The American auto giant sold Shanghai Automotive Industries Corp. 1 percent of their venture in 2009 before going through a restructuring in U.S. bankruptcy court. That gave Shanghai Automotive a controlling 51 percent stake and the right to record the venture’s revenue on its own books.

GM said the latest deal calls for the two sides to create an operating unit that will be owned 50-50. A separate sales unit will be created, with SAIC holding 51 percent, allowing it to continue recording sales revenue on its own books.

Akerson declined to say what GM was paying to recover equal ownership. The company said in 2009 the 1 percent stake sold then was valued at $85 million.

Automakers are looking to China to drive revenue amid weakness in the United States and Europe.

Ford Motor Co. unveiled the three-cylinder EcoSport sport utility vehicle and Chrysler showed a dragon-theme Jeep on Monday at the Beijing auto show.

“To be successful in China, we must tailor our vehicles to the specific tastes of Chinese customers,” said Mike Manley, Chrysler’s chief operating officer for Asia.

Ford premiered the scaled down SUV, designed for “urban adventurers” with a 1-liter engine. It is scheduled to be manufactured at Ford’s factory in the southwestern city of Chongqing.

Nissan, Toyota, Audi and China’s young but ambitious automakers also used Auto China 2012 to showcase luxury sedans and SUVs with China-specific features. The event, China’s biggest auto show this year, opens to the public on Friday.

Lamborghini SpA unveiled its first sport-utility vehicle in almost two decades on Monday as the Italian super car maker looks to expand its lineup.

The Volkswagen AG unit unveiled the concept SUV, called the Urus, in Beijing Sunday before this week’s auto show in the Chinese capital. Lamborghini sees potential sales of 3,000 vehicles a year for the SUV, Chief Executive Officer Stephan Winkelmann said at a company presentation.

Information for this article was contributed by Didi Tang and Joe McDonald of The Associated Press and by Chris Reiter and Siddharth Philip of Bloomberg News.