Hobbled US giants face Chinese firms in Shanghai

Agence France-Presse

But Chinese manufacturers such as Geely and Chery also had strong months and, sensing blood in the water, they see a chance to break out as global names."The economic slowdown offers real opportunities for Chinese domestic car makers," said Klaus Paur, automotive director for research firm TNS China, ahead of today’s start of the Shanghai international auto show.

Government incentives, such as tax rebates on smaller engine cars, helped drive China's auto sales to a monthly record of 1.08 million units in March.Vehicle sales in the first quarter rose almost six percent from a year earlier to 2.64 million units, according to official figures.Despite strong first quarter sales, 45 percent of prospective car buyers in China postponed purchases due to concerns over the economy, and a quarter have cut their budget, according to a TNS survey of more 1,000 mainland consumers.

These factors favor Chinese carmakers, who typically make cheaper vehicles than their foreign competitors, according to Paur."They can benefit from the cautious consumer behavior and position themselves as attractive alternatives to foreign brands," he said. GM said it set a monthly sales record in China last month.