BEIJING (Reuters) - General Motors Co (GM) (N:GM) is pressing ahead with its investment plans in China, the world's largest auto market, where it expects car demand to grow 3-5 percent a year on average until 2020, executives at the U.S. car maker said.
While GM continues to bet on the growth of the Chinese market, consultancy JD Power has said that three or more years of less than 5 percent growth would trigger a painful restructuring in China's auto sector.
Analysts say China's auto market has entered a period of unprecedented uncertainty as the economy grows at its slowest pace in 25 years.
"Even though the China market is maturing, it will still be a tremendous source of growth for us in both the short term and the long term," GM President Dan Ammann told a media conference on Monday.
China chief Matt Tsien, who disclosed the car market growth estimates until 2020, said GM's Wuhan plant that opened last year was operating at maximum utilisation, and a planned second phase is being added there that will double capacity to 480,000 units a year.
He said that sport-utility vehicles, multi-purpose vehicles and luxury cars will continue to be hot segments in China going forward, with SUVs and MPVs accounting for 40 percent of firm's overall China growth to 2020.
GM will launch 60 new or refreshed vehicles in China in the next five years, including 13 this year, Tsien said, adding that more than 10 new green energy vehicles will be introduced in that market by 2020.
China's automakers association is expecting overall vehicles sales this year to grow 6 percent, compared with 4.7 percent last year and 6.9 percent for 2014.
Vehicle sales growth ground to a halt in mid-2015 as the economy's growth slowed and the stock market slumped, although car sales rebounded late in the year after the government cut taxes on small engine cars from October.