Hard times for the auto industry are about to get worse for thousands of workers at the world's second biggest car company.

U.S.-based General Motors said Tuesday it will lay off 10,000 salaried workers.  The automaker said the cuts will come from its operations around the world, with more than one-third affecting workers in the U.S.

Last week, GM reported January car sales in the U.S. plunged by 49 percent.

Still, GM's head of global sales, Jonathan Browning, said he expects production of vehicles at the company's U.S. facilities to start increasing.  But he cautioned the increase would be the result of "balancing inventory" and not because of a jump in demand.

He also said GM will continue to focus on emerging markets like India and China.

GM's announcement comes on the same day data from China shows that country has overtaken the United States in auto sales - making China the world's biggest auto market for the first time.

The China Association of Automobile Manufacturers said Tuesday China sold some 735,000 vehicles in January, about 80,000 more than the United States during the same month.

Industry analysts said China may have surged ahead in January because of a record slump in U.S. car sales.

They also noted that while both countries have been hit by the global financial crisis, China typically sees a boom in sales in January because of its annual Lunar New Year holiday.

The Chinese government has also been taking steps to boost car sales.  In January, the government announced plans to cut the sales tax on small cars in half until the end of 2009.

Last week, GM's executive director of global market and industry analysis said he expected auto sales in China could hit 10.7 million units this year, which is nearly a million more than his estimate for U.S. auto sales.  


Some information for this report was provided by AP and Reuters.