General Motors Co (GM) may hasten plans to increase output in China after regulators in the world's largest automobile market said they will impose punitive duties on some vehicles imported from the US.

Levies of as much as 12.9 percent for its autos "may accelerate GM's localization plans," Himanshu Patel, a New York-based analyst for JPMorgan Chase & Co, wrote in a note to clients. The Detroit-based automaker already plans to add local production and only 1.3 percent of GM's 2.43 million vehicles sold in China last year were imported, he wrote.

China's decision to increase import levies comes three months after the World Trade Organization rejected its appeal of a ruling backing US duties on tire imports. China's auto sales are rising at the slowest pace in 13 years, pressuring local producers to consolidate as foreign carmakers post gains.

"The move shows that China is always capable of intervening politically in its markets," said Juergen Pieper, a Frankfurt-based analyst with Bankhaus Metzler. "The automobile industry is very dependent on China for growth, and there're doubts about the pace of future expansion."

Automakers declined on concern higher duties may soften demand in the Chinese market, which LMC Automotive says may rise to 21 million passenger-car sales by 2015. GM fell 3.2 percent to $19.47 in New York trading, the lowest closing price since its initial public offering in November 2010.

'Modest Impact'

The tariffs will have a "modest impact" on GM, JPMorgan's Patel said, because most of the automaker's vehicles imported to China are low-volume models such as the Buick Enclave and Cadillac SRX sport-utility vehicles.

"Our goal is to build where we sell," Klaus-Peter Martin, a company spokesman, said in a phone interview. About half of a percentage point of sales in the region come from the GM's North American plants, he said.

Duties may be as much as 8.8 percent for Chrysler Group LLC, the Auburn Hills, Michigan-based maker of Jeep SUVs, China's commerce ministry said on its website. The US units of Bayerische Motoren Werke AG (BMW) and Daimler AG (DAI) will face duties of 2 percent and 2.7 percent respectively, it said.

Ford Motor Co is not affected by the tariffs, Todd Nissen, a company spokesman, said in an e-mail. The only vehicle Ford imports into China is its Edge SUV built in Canada.

2.5-liter engines

The levies affect vehicles with engines that are above 2.5 liters in size, according to the ministry's website. Honda Motor Co's US operations and other automakers the ministry didn't specify will also be subject to the tax. China currently imposes tariffs of 25 percent on imported cars.

BMW leads automakers that have "material exposure" to the duties with about 25,000 vehicles imported from North America, Itay Michaeli, a New York-based analyst for Citigroup Inc, wrote in a note to clients. Chrysler imports about 24,000 primarily through its Jeep brand and Daimler imports about 18,000, he said.

The WTO in September rejected China's appeal of a ruling by the organization's judges last December that found tariffs on $1.8 billion of car and light-truck tires from China were legal. President Barack Obama imposed the duties of as much as 35 percent in September 2009 under a so-called safeguard provision designed to protect US producers from a surge in imports.

'Flummox' buyers

"This is hardly going to flummox the buyer of a high-end car," said Namrita Chow, a senior analyst at IHS Automotive in Shanghai. They're really not going to be bothered by a few percent here and there."

BMW doesn't expect the new import duties to have a significant impact on its sales in China, Mathias Schmidt, a spokesman, said by phone, adding that the failure to resolve the trade dispute was "regrettable." Daimler's Mercedes is reviewing the potential impact from the duties, said Bettina Singhartinger, a spokeswoman.

Chrysler sold 23,482 vehicles in China last year and aimed to increase deliveries to 40,000 this year, the company has said. The automaker declined to provide updated China sales results for 2011. Ariel Gavilan, a company spokesman, declined to comment on what affect the new duties may have on profit.

Sales pace

China's passenger-car sales rose at the slowest pace in six months in November, as monetary tightening and the removal of government incentives dented demand. Wholesale deliveries, including sport-utility vehicles and minivans, gained 0.3 percent to 1.34 million last month, the China Association of Automobile Manufacturers said Dec 9.

China's vehicle sales have slowed this year from 2010's record 32 percent expansion as inflation, higher interest rates and the end of a two-year stimulus plan deter purchases. Chinese deliveries may expand at a slower pace than US light vehicle sales for the first time since at least 1998, according to the Chinese trade group.

Mercedes is discounting locally produced vehicles in China by 6 percent to 10 percent, while BMW is offering some "small discounts" on inventory that is more than six months old, Jose Asumendi, a Royal Bank of Scotland Group Plc analyst, said in a note to investors, citing dealer visits in the country.

Volkswagen AG is discounting imported vehicles by 5 percent, and offering limited or no discounts for locally produced cars, Asumendi said.