China Auto Duties Not a Problem for GM

Company says only small volume is affected.

China's punitive anti-dumping duties imposed on luxury cars from abroad have had little impact on General Motors' business there, a top GM executive said on Jan. 9.

Although three of GM's top models are subject to the duties, only a small volume is affected, said Tim Lee, GM's head of Asia-Pacific operations.

"It's a miniscule volume for us in China," he told reporters at the Detroit auto show. He put the potential impact at less than 0.5% of the total volume of sales of GM's Cadillac Escalade, Cadillac CTS and Buick Enclave, the three cars affected by the duties.

China declared the duties, which also hit imports from Chrysler, BMW, Mercedes-Benz US International, American Honda Motor and Ford Motor, in December, in what was seen as a tit-for-tat action after Washington moved to have China investigated for dumping solar panels into the United States.

Lee said China had actually quietly set the duties on the U.S.-made cars a year earlier, but then suspended it.

"They were sort of held as a sword of Damocles over our head" and enacted apparently in response to the US move on Chinese-made solar panels. There are trade issues between China and the United States that impacted that particular decision," he said.

But it hardly affects the business of GM in China, where the company manufactured and sold around 2.55 million units last year, up more than 8% from 2010.

"We basically sell what we build in China in China," Lee said.

Lee said the company was still talking with the government over how the duties would be applied. He said the government in fact had originally invited GM to sell the Enclave in the country, and so GM is arguing that that particular model should not be affected by the duties.

But, he said, "on the grand scale of the company of General Motors, this is not a big issue."

Copyright Agence France-Presse, 2011

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