General Motors Enjoys Record Year in China in 2004

January 6, 2005

Shanghai, China - General Motors enjoyed another record year in mainland China in 2004. Its vehicle sales grew 27.2 percent on an annual basis to 492,014 units, an all-time high. With its sales outperforming the industry as a whole, GM's market share rose from 8.5 percent at the end of 2003 to an estimated 9.3 percent at the end of 2004.

"For GM and our domestic joint ventures in China, 2004 represented a solid year," said Phil Murtaugh, Chairman and CEO of the General Motors China Group. "Despite an overall slowdown in the growth of the vehicle market in mid-2004, we maintained our momentum by introducing new and upgraded products and services to meet the needs of a wide range of vehicle buyers nationwide."

Shanghai GM, GM's flagship joint venture with Shanghai Automotive Industry Corporation Group (SAIC), sold a record 252,869 vehicles in 2004, a 25.7 percent increase from 2003. It expanded its vehicle lineup through the introduction of upgraded versions of its existing Buick products and new models such as the Buick Excelle HRV hatchback and Buick Royaum premium sedan.

SAIC-GM-Wuling, GM China's joint venture with SAIC and Wuling Automotive in Liuzhou, Guangxi Zhuang Autonomous Region, also had a record year. Sales of China's number two mini-vehicle producer rose 30.5 percent on a year-on-year basis to 235,188 units. SAIC-GM-Wuling was boosted by the arrival of an upgraded version of its key minivan, the Wuling Sunshine, and a 1.0-liter version of its Chevrolet Spark mini-car.

GM China's import lineup continued to expand as well, as the automaker officially launched two new brands in 2004 to meet strong demand in the premium and luxury vehicle segments. It rolled out the Saab premium brand at the end of May. The 9-3 Sport Sedan and 9-3 Convertible joined the 9-5 in GM's growing Saab lineup. In June, the Cadillac brand premiered at Auto China 2004 in Beijing. The first Cadillac product, the CTS luxury sedan, entered the market later in the year.

"In line with our commitment to playing a leadership role in the long-term development of China's passenger car and commercial vehicle market, we are not focused solely on short-term growth," said Murtaugh. "We continue to look to the future by increasing our investment both on our own and with our strategic partner SAIC."

GM China announced an important series of investments in new products, powertrains and production facilities in early June. Pending Chinese government approval, GM plans to invest more than $3 billion over the course of three years.

The investments include the expansion of GM's unique automotive engineering and design organization in Shanghai, the Pan Asia Technical Automotive Center. In 2004, PATAC opened a new prototype laboratory, a Euro III and Euro IV emission test lab, and a virtual reality design studio. A kinematics and compliance lab and a noise, vibration and harshness test lab are under construction.

GM, together with SAIC, also launched two new joint ventures and a restructured joint venture in 2004.

The two companies, through their General Motors Acceptance Corporation (GMAC) and Shanghai Automotive Group Finance Company (SAICFC) units, introduced China's first automotive financing company in August. GMAC-SAIC Automotive Finance Company, which is based in Shanghai, was created with the goal of making vehicle ownership a reality for a greater number of Chinese consumers.

Joining up with Shanghai GM, GM China and SAIC formed Shanghai GM Dong Yue Automotive Powertrain. Situated in Yantai, Shandong, the joint venture is preparing for the start of production of engines for the domestic joint ventures of GM and SAIC in the second half of 2005.

In addition, GM China and SAIC, along with Shanghai GM, formed Shanghai GM (Shenyang) Norsom Motors in Shenyang, Liaoning. Under the management of Shanghai GM, the former Jinbei GM began manufacturing the Buick GL8 executive wagon in September.

Looking further into the future, GM continued to make sustainable development a priority in China. In early October, it showcased several advanced technology vehicles at the Challenge Bibendum, the world's premier clean vehicle event, in Shanghai. At the end of that month, GM signed a first-of-its-kind agreement with SAIC for cooperation in developing and promoting the commercialization of clean energy vehicles. Among the projects planned are a hybrid bus and a fuel cell vehicle based on GM's HydroGen3.

"Last year, China's vehicle market moved from a state of unusually high growth to a state of steady and sustained growth," said Murtaugh. "We remain confident in the overall prospect of China and expect 2005 to be another positive year for GM and our domestic operations."

GM plans to introduce a record number of products this year, further strengthening its leadership position among global automakers in China in terms of the breadth of its product portfolio. In addition to rolling out more than 10 all-new or upgraded vehicles, it also will drive the growth of its most popular global brand, Chevrolet, in China. GM's aim is to build Chevrolet into another high-volume brand to go along with Buick as well as its other brands (Wuling, Cadillac, Saab and Opel).

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