BEIJING, Mar. 31 -- General Motors (GM), the world's No 1 automaker, announced yesterday the head of its China arm will step down.

    Phil Murtaugh, chairman and chief executive officer of GM's China business since 2000, "will leave the company for personal reasons," said a spokeswoman from GM China Group without elaborating.

    "Details of Murtaugh's replacement are being finalized and an announcement is pending," GM China Group said in a statement.

    The 50-year-old Murtaugh's departure comes as a big surprise after the firm's impressive growth in China under his leadership since 2000.

    Foreign reports attributed his resignation largely to GM's sales slump in China so far this year.

    However, Troy Clarke, vice-president of GM Group and president of GM Asia Pacific, had only praise for the departing CEO.

    "Murtaugh has played a key role in GM's aggressive China growth strategy. Our Chinese partnerships are strong. Our China operations are doing well. Under Phil's leadership, GM has achieved record sales approaching nearly 500,000 units a year and become an industry leader with more than 9 per cent of the vehicle market," Clarke said in a statement.

    "Our China sales are on track for double-digit growth once again this year," he added.

    GM's sales in China climbed by 27.2 per cent year-on-year to 492,014 vehicles in 2004.

    The figure maintained GM as the second biggest automaker in China after Volkswagen, which sold almost 650,000 vehicles in the nation last year, down 7 per cent from 2003.

    "GM's sales in China did decline from January to February this year compared with the same period of last year. But this could not be the main reason for Murtaugh's resignation because it did not represent GM's full-year performance in China," said a Shanghai-based analyst with a US auto industry consulting firm, who asked not to be named.

    "Moreover, many of GM's rivals in China are also seeing sales tumble and the whole auto market is at a low ebb," the analyst told China Daily.

    Sales of China-made vehicles dropped by 6.94 per cent year-on-year to 684,500 units in the first two months of this year, industry statistics showed.

    "Murtaugh did a great job with GM's marketing and sales and collaboration with partners in China," said the analyst.

    GM runs four joint ventures in China with Shanghai Automotive Industry Corp (SAIC), one of China's biggest vehicle producers.

    The joint ventures produce Buick, Chevrolet and Cadillac cars.

    In January, GM said it planned to introduce a record number of all-new or upgraded vehicles in China this year.

    The company announced last year it would invest a further US$3 billion jointly with SAIC into the joint ventures and double its annual production capacity in the country to 1.3 million units by 2007.

    (Source: China Daily)