SHANGHAI, China - General Motors' sprawling assembly plant here, a joint venture with China's Shanghai Automotive Industry Corp., is operating far below its design capacity of 100,000 units a year.
Despite the addition earlier this year of a wagon variant of the North American minivan to the plant's product mix of three executive sedans, total volume this year is expected to be only 30,000 units.
The wagon has been a disappointment, GM admits.
'Our expectation was that it would be an explosive segment,' said Phil Murtaugh, chairman of GM China Group. 'But wagon sales have not taken off.'
That misfire explains in large measure GM's push to get the compact Buick Sail into production as early as possible. The company expects to build 30,000 Sails in the eight months the car will be in production next year.
But GM is dealing with a market that has changed dramatically since planning began for its plant here. Competition has intensified even as the market has fallen far short of early expectations.
Murtaugh says industry sales this year are expected to be up about 17 percent, pretty close to the 20 percent growth that China posted in three of the last five years.
Despite that optimism, carmakers uniformly agree that many shoppers are delaying vehicle purchases in the belief that prices will fall once China joins the World Trade Organization and opens its doors wider to imports. China is expected to join the World Trade Organization within six months.
For that reason, Automotive Resources Asia, a consulting firm that tracks several Asian markets including China, estimates that car sales including minivans will rise only between 6 percent and 7 percent this year to around 620,000.
That puts added pressure on the new Buick Sail to get the giant Shanghai factory humming.