economy - GM cuts car prices by over ten percent

GM has started a new price war, just ahead of the buying spree ahead of Springfestival, by lowering the prices of their cars dramatically, the China Daily reports. The company passed last year Shanghai Volkswagen as the top-selling company in the car market and claims a sales growth in 2005 of 29 percent to 325,000 vehicles, compared to 2004.
Overall profits, estimated to be US$ 2.1 billion last year, went down 49% compared to 2004 and is bound to melt away even more as competition heats up. Sales in China are expected to grow this year 12%, although that is of course speculation by quotable analysts. Traditionally Chinese consumers react adverse on dropping prices: they tend to wait until the prices drop even more.