GM CEO Worried About US Recession Risk
General Motors chief executive on Wednesday expressed concern about the risk of a recession in the United States, but said pent-up demand was expected because of the need to replace ageing cars in the world's biggest economy.
"It's hard to handicap but clearly we're concerned about it, as most Americans are," Daniel Akerson told Reuters in an interview in Shanghai, when asked about U.S. recession risks.
Despite slipping consumer confidence, Akerson said some demand for vehicles was likely because of an ageing fleet in the United States.
"We know that the car park, or the average age of the fleet across all types and all makes in America, is at a general high, so there's likely to be some pent-up demand," he said.
On China, another key market for GM , Akerson said he expected the company's vehicle sales growth to slow this year in line with the overall trend.
GM expects 5-10 percent growth in its vehicle sales by unit in China this year, down from a 28 percent rise in 2010, Akerson said.
That compares with GM's expectation that the overall vehicle market in China will grow by about 5 percent this year, to 19-19.2 million units, GM China President Kevin Wale told reporters.
Wale reiterated that GM was in talks with SAIC Motor Corp Ltd on buying back a 1 percent stake in their main joint venture, Shanghai GM, which GM sold to SAIC in 2009. The sale left SAIC with 51 percent of the venture.
Wale declined to give further details.
GM and SAIC on Tuesday signed an agreement to develop and build electric vehicles in China, the world's largest auto market, allowing the two to eventually offer electric vehicles (EVs) that qualify for expected Chinese "green" subsidies.
China's once-sizzling auto market has reverted to a more subdued growth pattern after the government ended tax incentives for small cars and subsidies for van buyers in rural areas.
Monthly car sales in May declined for the first time in more than two years even though promotions and free giveaways helped draw consumers back into showrooms in the following months. They were up 7.3 percent from a year earlier in August.
Overall vehicle sales, which include trucks and other vehicles, grew 3.3 percent in the first eight months from a year earlier to 11.98 million units, according to the China Association of Automobile Manufacturers (CAAM).
Akerson said in February that GM would add more than 20 new and upgraded models in China in the next two years, without giving specifics.
China sales have been a major bright spot for GM and other global industry giants, including Bayerische Motoren Werke and Volkswagen. Last year, GM sold 2.35 million vehicles in the country, more than the Detroit heavyweight sold in its home market.
Last month, GM, the biggest overseas automaker in China, rolled out the first car under its newly created Baojun brand in the country. The vehicle, produced through a venture with SAIC Motor, would be made available in first- and fourth-tier cities gradually, it said at the time.
While continuing to reap profits from pricier Buick and Cadillac models, GM has been stepping up its presence in smaller, inland cities that are quickly replacing coastal cities as the major industry growth driver.
Other foreign auto makers, including Nissan and Honda, are also working with their Chinese partners to tap lower-tier cities with affordable quality cars.