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September 25, 2009

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GM expects more moves to stabilize auto sales

GENERAL Motors says it expects further government stimulus measures to ensure stable auto sales in China after the tax cut on new cars expires at the end of the year.

"We expect there will be modifications in policies that are designed to ensure there is no sharp decline in car sales in January," Kevin Wale, president and managing director of GM China, said at a media briefing in Shanghai yesterday.

China halved the tax on new cars with engine capacities of 1.6 liters or less to 5 percent last January as part of efforts to stimulate the lagging auto industry. The incentive will end on December 31.

"The Chinese government is fully aware of the danger of a sharp reduction in the market if policies are changed unilaterally," Wale said.

Auto sales in China in the first half climbed almost 19 percent from a year earlier to 6.09 million vehicles, according to the China Association of Automobile Manufacturers.

Wale was attending the opening of GM's China Science Lab in Shanghai, its eighth research facility in the world. The company said it hopes to tap into the growing Chinese market by working on breakthrough technology in propulsion systems and battery fabrication.

John Du, former general manager of Intel Corp's China Research Center, will be director of the new research facility.

China's auto sales may jump 28 percent to 12 million vehicles this year, overtaking the United States as the biggest car market in the world, an official at the National Development and Reform Commission said earlier this month.

Shanghai General Motors, GM's joint venture with the SAIC Motor Corp, said sales in August almost doubled from a year earlier to more than 63,000 units.


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