General Motors Corp posted its first year-on-year sales decline for its Chinese passenger vehicle venture last year, as new models failed to appeal to Chinese consumers.

Sales at Shanghai General Motors Co, GM's venture with Shanghai Automotive Industry Corp, dropped 8.3 percent to 458,642 units last year from 2007, the car maker said in a statement yesterday.

The slump, compared to an industry-wide sales growth estimated at 5 percent to 8 percent during the same period may lead SGM to lose its spot as the best-selling passenger car maker in China for the first time since 2005.

"SGM's sales performance lagged behind the industry average as the pricing and design of new models failed to appeal to consumers," said Zhu Xuedong, an analyst from Industrial Securities Co.

"Its models are also less competitive in terms of fuel efficiency, which is more and more important to Chinese consumers," he added.

China's vehicle market cooled in the second quarter of last year as the financial crisis undermined the purchasing power of consumers.

SGM's sales in China, the world's second-largest auto market, slowed as customers opted for Volkswagen's Jetta and the Toyota Corolla over its revamped Buick Excelle.

The car maker introduced various models last year including the remodeled Buick Excelle, Chevrolet Aveo, Buick Regal sedans as well as the imported Cadillac CTS luxury car.

Sales of Chevrolet-branded vehicles bucked the decline with a year-on-year growth of 15.6 percent to 170,000 units last year, SGM's statement said. Cadillac and Saab, its two other brands, also enjoyed high growth. But Buick's lackluster performance still managed to drag down overall figures.

SGM is pinning hopes on its Chevrolet Cruze to rev up sales this year when the mid-market sedan hits the market in the second quarter.

GM, which just won a US$4-billion bailout loan, is counting on emerging markets to offset sales falls in North America.

GM said it expects to boost sales on China's mainland by about 9 percent to 1.2 million units as new models and the government's stimulus plan help to revive overall demand.

(Shanghai Daily January 6, 2009)