General Motors’ price reductions in China fail to stop sales decline

Article by Christian A., on June 7, 2015

For the second straight month, General Motors reported a decline in sales in China, its biggest market, even when it reduced prices on 40 models of its Buick, Chevrolet and Cadillac brands. In May 2015, a 4% drop from the previous year was reported by GM and its China joint ventures with a total of 252,567 vehicles sold.

GM said that the decline is attributed to the phasing out of outdated models and a changeover. Economic growth in China has slowed down. As a result, foreign automakers are struggling while local brands are able to widen their market share by offering more affordable SUVs. The increase in passenger-vehicle sales has been at its slowest pace in five months in April.

Majority of the expansion has been contributed by local brands. Janet Lewis, an analyst at Macquarie Group Ltd. in Hong Kong, said that consumer sentiment is “at a low point.” She explained that there’s a tendency to postpone buying when 80% of the consumers are looking for their first car. She said that GM isn’t in an especially good place in its model cycle.

Last month, GM’s prices were cut after deliveries dropped in April. Price reductions of up to 53,900 yuan ($8,700) were announced by its joint venture with SAIC Motor Corp. However, the price cuts didn’t put a stop to Buick’s decline of 13% and Chevrolet’s 2.2% drop in deliveries. Production of the Envision SUV, which broke its monthly record after selling 11,556 units, will be increased.

Cadillac sales grew 11% while there was a fourfold increase in sales of GM’s low-cost Baojun brand. GM’s sales in China increased by 5.1% for the first five months of the year to 1.47 million units. Its annual growth is forecasted to be about 6% to 8%. Matt Tsien, head of GM’s China operations, said that the vehicle market in China still grows at “a moderate pace.”

He said that this 6-8% annual growth is “significant” considering how big the size is of the largest passenger vehicle market in the world.

He added that the company is persistently reacting to shifting consumer preferences with additional new products in the high-growth SUV, MPV and luxury segments, such as the Baojun 560 and Buick Envision, and the Buick Verano and new Chevrolet Malibu sedans. Furthermore, the company is raising output to cope with the demand for the Envision.

Topics: gm, china, sales

If you liked the article, share on:

Comments

Recommended

The primary suggestion of a 4x4 ute from French company Peugeot was first revealed in 2016. Fifteen months later, the production version is launched. Now, Peugeot is not shying away...
by - June 24, 2017
The new Jaguar E-Pace crossover will soon hold its official launch on July 13 and is expected to arrive at the showrooms by early next year. It couldn’t have come...
by - June 24, 2017
As prices of the original Shelby Cobra have skyrocketed into astronomical proportions, there are firms like Superformance that serve replicas to consumers who demand the same levels of performance at...
by - June 24, 2017
New and improved 2018 Subaru Legacy comes packed with a number of upgraded features from the get go - from the exterior to the interior. And the company has finally...
by - June 23, 2017
In an interview involving Lamborghini CEO Stefano Domenicali and Automotive News, the topic about the Urus was thoroughly discussed. This super SUV is scheduled to make its debut later this...
by - June 23, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries