What’s good for China has been good for General Motors Co.

GM sold more cars and trucks in China than it did in the U.S. last year, marking the first time that a foreign market has outpaced the automaker’s domestic sales in its 102-year history.

“This is the wave of the future,” said George Magliano, an economist at IHS Automotive. “The Chinese market is going to grow faster than the U.S., and it will continue to be this way.”

U.S. automakers are increasingly relying on foreign sales and international partnerships to defray development expenses and recover from one of the worst industry downturns in American history.


Vehicle sales in China rose nearly 29% last year to 2.4 million, GM said Monday. U.S. sales rose just 6% to 2.2 million in part because of the slow economy and GM’s closure or sale of the Saturn, Pontiac, Hummer and Saab brands as part of its financial restructuring.

Despite its bankruptcy reorganization in 2009 and efforts to turn around the American market, GM remains one of the best-positioned automakers in emerging markets, Magliano said.

GM has led all other global automakers in Chinese sales for six consecutive years.

“GM took the big risk moving into China with Buick some years ago, but now its global footprint is actually better than even Toyota’s,” Magliano said. “Ford has made some good moves, but they are still trying to catch up in emerging markets.”


Toyota Motor Corp., which narrowly beat out GM last year to hold its position as the world’s largest auto seller, trails far behind its American rival in China, where the Japanese company sold 846,000 vehicles in 2010. Vehicle sales by Ford Motor Co. and its Chinese partners were 582,000 in 2010.

“China is probably the most exciting market globally,” said Kirk Ludtke, an analyst at CRT Capital Group.

Car registration in Beijing has increased to 4.8 million from 2.8 million since 2005, with 700,000 new cars registered in the last year alone. The boom has created massive traffic problems in China’s capital. The Chinese government now limits the number of new license plates in Beijing to 240,000 awarded annually through the lottery system.

China surpassed the U.S. as the world’s largest automobile market two years ago. Sales of passenger cars rose 33% in 2010 over the previous year, the China Assn. of Automobile Manufacturers reported.


GM is well situated to keep growing and could catch Toyota to once again become the world’s largest auto company, analysts said. Overall, GM’s global sales rose 12.2% to 8.4 million vehicles last year. Global sales for Toyota rose 8% to 8.42 million.

GM “is No. 1 in sales in the two regional markets that we think will grow the fastest over the next five years, China and North America,” Ludtke said.

And there is no reason to think that GM will falter in China, he said.

“GM and its partners have the largest market share in China,” Ludtke said, and GM will benefit from its venture partners “understanding the culture and political environment.”


GM said Saturday that it had signed a two-year agreement worth $900 million to export Cadillac, Buick and Chevrolet vehicles and components to China.

The deal was part of a series of trade agreements between China and the U.S. signed during the visit of Chinese President Hu Jintao to the U.S. last week. The vehicle exports are valued at $500 million and the component exports are valued at $400 million.

Although China is now GM’s biggest market, sales there aren’t as profitable as the automaker’s business in North America, in part because it splits the proceeds with three joint-venture partners.

According to one commonly used measure of operating profit, GM collected $2.5 billion from its international operations division, of which China is the largest piece, through the first nine months of 2010. That compares with $4.9 billion by the same measure in North America on sales of fewer vehicles. The company continues to lose money in Europe.


Business is turning up in the U.S., GM said. The automaker announced Monday that it planned to add a third shift at its factory in Flint, Mich., a move that will generate 750 jobs. The plant makes the Chevrolet Silverado and GMC Sierra heavy-duty pickups.

The shift is expected to start in the third quarter, with employees starting to work in the second quarter.

“Adding a third shift is a response to customer demand for heavy-duty pickups, which most people use to tow, haul and plow,” said Mark Reuss, president of GM North America.

Small businesses and larger companies are starting to replace aging trucks as the economy rebounds.


Automakers sold nearly 411,000 large pickup trucks and cargo vans in the last quarter of 2010, up 24% from the same period in 2009, according to auto information company Edmunds.com. It was the best showing since the industry sold more than 491,000 such vehicles in the third quarter of 2008.

jerry.hirsch@latimes.com