General Motors boasted in April that it would double sales in China by 2013 with the introduction of 30 new or upgraded models over the next five years.

Last month, GM forecasted that its vehicle sales in China would grow 10% this year alone and now it seems those numbers may have been a bit conservative. Kevin Wale, GM's China Group President, has just announced that the company expects vehicle sales in the region to grow by a little more than 20% in 2009.

While the rest of the global automotive industry is stuck in a rut, the emerging Chinese market seems largely unaffected by stagnant North American sales or GM's bankruptcy filing in early June. As of now, China is the company's second largest market (thanks in part to their insatiable appetite for Buicks).

[Source: Automotive News - Sub. Req.]

Most of the world has been knee deep in a wicked recession for quite a while, and auto sales have been hit especially hard. Here in the U.S., the numbers have been abysmal, as the first half of the year saw only 4.8 million sales through June. China, on the other hand, is running away with the overall sales lead, as the emerging emerged market has added 6.1 million cars and trucks to its still developing roadways. According to The Associated Press, June sales were up 36% over the same period in 2008, and they're up 17% on the year.

The big winner in the market so far this year appears to be General Motors. The struggling Detroit, MI-based automaker has seen its China sales jump by 38% this year; while its U.S. sales have tanked. Industry analysts are predicting that the overall market for passenger cars in China will be between 10 and 11 million units.

Most experts weren't expecting China to pass the U.S. in overall sales for another decade, but the crumbling American auto industry has expedited the power shift, at least for the short term. With 1.3 billion people and a healthy economy, this day was destined to come.

[Source: The Associated Press via Google]

Chinese National Radio recently reported that Tengzhong wouldn't be allowed to purchase Hummer due to environmental concerns. The company released a statement after that news broke saying that while there was no "definitive agreement," the CNR report wasn't based on facts from the government regulatory body in question, and Tengzhong is still working on the deal.

Last week, in a report titled "Tengzhong may get green light from the regulators for its acquisition of Hummer," CNR's take on where things appears to back up Tengzhong's view that the game is not yet played. The company's discussions with the National Development and Reform Commission (NDRC) and the Ministry of Commerce -- it needs approval from both parties -- have begun, and three options for concluding a deal were proposed.

If Tengzhong can convince the authorities of its expertise and business blan, and gets approval from both parties, it wants to set Hummer up in Sichuan province. If there is resistance to setting Hummer up directly, Tengzhong could try to base the company in one of China's ten bonded areas -- harbor points where the vehicles aren't officially "in" the country until taxes and fees are paid -- but this could impact the company's ability to sell Hummers in China. Or, the company could simply become a foreign investor in Hummer.

It isn't clear whether those options are Tengzhong's take on the purchase, or if that was just more speculation from CNR. Hummer had no comment on the matter.

[Source: Hummer]

Even though Beijing Automotive (BAIC) tendered a non-binding offer for Opel, the company is said to have no chance of actually acquiring the brand. General Motors is still in talks with Magna and its partners, GAZ and Sberbank, and according to Sberbank CEO German Graf, "The choice has been made and the question now is of how to structure the deal."

Observers also feel that the GM-Magna agreement is merely waiting on some dotted I's, crossed T's and that the deal won't fall apart unless Magna blows it up or walks away. That hasn't stopped GM and the German government from creating the appearance of courting other bidders for Opel and Vauxhall, including BAIC and Belgium's RHJ.

BAIC appears to be serious, even if everyone assumes that GM's just using it as a decoy. Magna wants to get the paperwork inked by July 15, and that's around the same time that BAIC wants to make a binding offer for Opel's purchase. It's working with Deutsche Bank and PriceWaterhouse Coopers on its proposal, and we can only assume BAIC will be ready with a bag full of cash in the unlikely event Magna exits stage left.

[Source: Auto News, sub req'd]

We've been hearing Chinese officials say for quite some time now that there are far too many automakers in the country for a healthy market in the long-term, but we didn't realize until today just how out-of-hand it may be. According to state-run Chinese news agency Xinhua, China has seen an unprecedented 89 new automobile launches so far this year.

That's surely a big number, but it doesn't really hit home until you consider that 89 vehicles in the first half of 2009 averages out to a new or heavily revised vehicle appearing in China once every two days. Of those new designs, 73 were cars, nine were SUVs, six were MPVs and – in contrast to typical American vehicle launches over the same period – only one was a crossover.

As you're surely aware, 2009 is only half over, and there are reportedly some 50 new vehicles still slated for introduction before the end of the year, equaling about 140 new models introduced in 2009. The good news, at least as far the bottom line goes, is that the new releases have translated into sales. The 4.96 million vehicles sold between January and May of this year represent a 14.29-percent increase over the same period in 2008. Still, considering the glut of new models hitting the market, one has to figure that a goodly number of those vehicles will go begging.



[Source: Gasgoo]

General Motors' pending deal to offload its unwanted HUMMER brand may have hit a major snag. Although no official word has come from the Ministry of Commerce or the National Development and Reform Commission, state-run radio organizations are reporting that the Chinese government will indeed block the sale of HUMMER from GM to Sichuan Tengzhong Heavy Industrial Machinery Co. It's impossible to know exactly how this whole mess will play out, but these reports clearly jive with the general sentiments we've been hearing since the deal was first announced.

According to Chinese radio reports (via the BBC), there are two main objections to the HUMMER deal. First, the brand's environmental credentials don't match up with the direction the Chinese government wants its automakers to head. Second, there are questions as to whether Tengzhong has the expertise to properly manage a large automaker as it's business dealings so far have all been in the construction equipment segment.

Not so fast, says Tengzhong. In a newly-released statement regarding these latest reports, the company had this to say:

Some people may have views and speculation, but the Chinese government has a process that we respect... The view expressed on China National Radio's website did not quote or source anyone at NDRC. We do not yet have a definitive agreement, but are developing our proposals with GM and Hummer and we will continue to engage with the appropriate authorities in an appropriate manner.

At this point, it seems equally as possible that a decision could either come down in short order or come only after a long series of protracted negotiations. Stay tuned. Thanks for the tip, Dave S!



[Source: BBC]

Further proof that General Motors is readying a Opel Astra derivative for the Buick brand has just arrived in the form of spy shots showing a mid-size mule testing at Germany's Nürburgring. Somewhat obscured behind the excessive camo is Buick's trademark "waterfall" grille, however, the A-pillar and C-pillar survive the transition from Opel to Buick.

Inside, the badge engineering is markedly more apparent with what looks like an instrument panel, center console, and steering wheel directly ported over from the recently revealed 2010 Opel Astra. In all likelihood, the Buick version will be sold almost exclusively in the Chinese market and, although it would be built along side the Cruze at GM's Lordstown, OH plant, it's doubtful that the compact Buick will ever be sold in the States. But if it does, we'd suggest reviving the Skylark or Somerset moniker, because, hey... we know how well they went over before.

The Renault Laguna, Scenic, Megane and Megane Coupe-Cabriolet were designed by Renault, built by Renault factories in France, and have all earned five stars in European NCAP tests. They have also all been banned by China's General Administration of Quality Supervision Inspection and Quarantine for "serious safety risks" and inadherence to technical regulations.

Renault didn't even sell a thousand cars in China last year, and the GAQSIQ didn't specify what could have been so wrong with those four cars that they deserved a ban. It has only said that Renaults "have many times revealed quality problems" and urged the company to check its Chinese-market cars thoroughly. We have no idea what the technical and safety issues could be, but based on some of the Chinese cars being sold... well, you know the one about glass houses, right?

[Source: Automotive News, sub. req'd]

According to a report from Bloomberg, state-owned Chinese news agency Shanghai Securities News is predicting that it is unlikely the Chinese government will approve the purchase of Hummer from General Motors by Sichuan Tengzhong Heavy Industrial Machinery Co. Why? Apparently, China actually wants to reduce the number of automakers operating within its borders and favors keeping manufacturers with an eye towards fuel efficiency. Of all the labels people have put on the Hummer brand, fuel efficient hasn't exactly been one of them. According to Tim Payne, a spokesman for Tengzhong:

"Some people may have views and speculation but the Chinese government has a process that we respect. We have only just signed an MOU but as we develop our proposals with GM and Hummer we will continue to work with the appropriate authorities."

In other words, it's too early to draw conclusions about whether or not China will approve of the purchase of Hummer. However, it does seem unlikely that Tengzhong would enter into the deal with the belief that the Chinese government would squash it, no?

[Source: Bloomberg]

According to the Detroit Free Press, the 14 plants that General Motors is expected to announce for closure on Monday was going to be 16 plants until the UAW got its way on Capitol Hill. The union charged GM with closing factories, but instead of a commensurate reduction in production, GM was moving some of the manufacturing elsewhere, specifically China and Mexico.

GM said it will produce 1.83 million cars in the U.S. 2014 as opposed to 2 million today, and it would get one-third of its production that year from overseas. That one-third would notably be small cars, so much in play lately for every reason. The UAW suggested it would be amenable to "innovative labor agreement provisions" in order to make small car production work for GM domestically.

In that case it isn't Mexico or China that will suffer, but Canada. Our northern neighbor is expected to lose 23% of its GM export production (has anyone told CAW head Ken Lewenza yet?) while Asian importation climbs 98%.

For now, an assembly plant and a stamping plant have been spared from the initial list of U.S. closures. Another four plants have been designated "stand-by locations" that will come on line in case of a steep rebound in auto sales.

[Source: Detroit Free Press]