Volkswagen and General Motors are the two largest automakers in China. While all foreign automakers must share profits in the country with partner Chinese manufacturers, sales there are still a big contributor to their bottom lines.
GM reported $2.1 billion in equity income in China last year. That was a major factor in the automaker's full-year net income of $2.8 billion. Two weeks ago, GM CEO Mary Barra said she's confident her company can continue to expand sales even as China's auto demand slows down.
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"We still see an opportunity," she said. "When you look at what we have with Chevrolet and more SUVs coming and when you look at Cadillac, we're seeing some real momentum there."
Chao said GM is in better shape than other foreign automakers in China, mainly because its joint venture to sell lower-cost SUVs and cars in Western China is doing relatively well.
Western China, hours from Shanghai and Beijing, has been a bright spot for automakers because sales in that part of the country have not hit a saturation point, as they have in larger metropolitan areas in eastern China.
The inner China market has been a key to Ford's expanded sales figures in recent years, though its business in China has also stalled with sales flat in the first half of this year.
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Correction: This story has been updated to reflect the proper company for James Chao.