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General Motors expects China's car market to grow over 10 percent next year even without government incentives and maintain its position as the world's top car market for a long time, a senior executive said.
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AP |
China's industry-wide car sales in 2010 are expected to grow to over 13 million vehicles from an expected 12.5 million this year, GM International Operations President Nick Reilly told reporters late on Wednesday.
"There is underlying growth in that market without government incentives. It's already going to grow anyway, maybe 10 percent, and there are incentives on top of that. I'd expect even if incentives come off, it will grow 10 percent per year," Reilly said.
China's government will reduce stimulus measures to boost car demand, but will not scrap all of them at once, Reilly said.
GM will continue talks with key creditor KDB on long-term financial aid for its South Korean unit, although GM Daewoo & Technology has secured enough funds from a rights offering for operations, debt repayments and foreign exchange contract settlement for up to two years, Reilly said.
"The liquidity crisis was not as quite deep as we thought. The injection we made this week is enough for the forseeable future...at least 18 months to 2 years," he said.
On Friday, GM Daewoo said GM bought all of the new shares offered by the South Korean unit for 491.2 billion won ($414.6 million) and the U.S. carmaker would consider further financial aid if necessary.
"Even though we may not need any cash, we would still like to have a credit line for the long term. KDB is one candidate for that," Reilly said.
GM and KDB, GM Daewoo's No.2 shareholder, have been in negotiations over 1 trillion won of additional support for the unit, but have yet to reach an agreement.
GM will not discuss some of KDB's conditions for financial help, such as sharing licenses for cars jointly developed, said Reilly.
Reilly said KDB's demand to share licenses was "ill-thought" and the bank's request to appoint a co-chief financial officer (CFO) for GM Daewoo "unacceptable."
KDB has demanded a co-CFO position at GM Daewoo, saying the company posted a huge net loss last year due to massive foreign exchange bets to hedge overseas sales that turned sour on a weaker won.
But GM Daewoo board members from KDB advised the firm around the end of 2007 to plan for a firmer won, Reilly said.
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