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  • Jan 6th, 2004
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China's top foreign auto makers - Volkswagen AG and General Motors Corp - racked up sales growth in excess of 40 percent in 2003 as increasingly well-off consumers snapped up cars.

Germany's Volkswagen, by far the dominant player in the world's fastest-growing major auto market, would probably keep its top spot in 2004 as its capacity far surpassed a rapidly expanding General Motors, analysts said. But analysts warned intense competition would apply the brakes to growth in demand.

Foreign car makers have injected billions of dollars into China, chasing sky-rocketing demand from consumers as more mature markets stagnate, prompting fears of a margin-sapping glut.

General Motors on Monday posted a 46.4 percent rise in China sales in 2003 to 386,710 units and predicted strong demand this year.

"We achieved this growth amid unprecedented competition by aggressively rolling out new products," Phil Murtaugh, chairman of the US company's China operations, said in a statement.

Volkswagen's two manufacturing ventures, in Shanghai and the north-eastern city of Changchun, unveiled sales growth of just over 40 percent, with 694,000 vehicles pulling out of factories.

General Motors executives estimated market share of about 8.7 percent in 2003, up from 7.4 percent in 2002 - though that had yet to be finalised.

Market share for Volkswagen was not available, but it fluctuated around 33 percent in 2003. It easily surpassed an original sales target of some 600,000 vehicles for 2003.

Volkswagen did not give an outlook for 2004, but its parent company expects to pump out 1.6 million vehicles in China annually in four years' time after a six billion euro ($7.6 billion) investment in new capacity.

General Motors has foreseen sales in China hitting three million units a year by 2012.

Copyright Reuters, 2004


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