GM sales in China outpaced by US in first half of 2015

Article by Christian Andrei, on July 9, 2015

General Motors’ sales in China for the first half of the year have been on a slower pace than in the U.S. The Chinese economy has been slowing down and the market is currently being flooded by more affordable SUVs built by local car companies. From January to June 2015, a total of 1.72 million vehicles were sold by GM and its Chinese joint ventures.

This figure is 4.4% higher than the same period the previous year. In comparison, GM’s retail sales in the U.S. had increased by 4.5% in the same period. Auto companies have been working hard to increase the demand in China amid the slowdown in its economy and as concerns sprout over stock market issues.

The people’s discretionary spending have been affected. The situation in the U.S. is quite the opposite as sales in the first half of the year have been the highest in a decade as consumers have been replacing their vehicles, motivated by low interest rates and gasoline prices. Zhang Jing, an analyst at Phillip Securities (HK) Ltd. in Shanghai, said that the fortunes of these two countries have “reversed.”

GM’s sales in China have taken a hit because of its economy’s slowdown and in a smaller part due to its aging products. After observing a decline in deliveries last April, GM reduced the prices of its 40 models of its different brands last May. Price cuts of up to 53,900 yuan ($8,685) were announced by GM’s joint venture with SAIC Motor Corp.

Last June, GM recorded a 0.2% increase from the previous year with sales of 246,066 vehicles. In a statement, GM China President Matt Tsien said that to cope with the diverse demand in China, there has to be an “evolving product mix.” GM China will have to present more new and refreshed models in the second half of the year to cope with its growth momentum.

Last April, GM had made the shift to posting retail deliveries for China. In 2014, wholesale deliveries in China grew by 12%. GM said last month that it anticipates that its Chinese market will have a 6-8% annual growth.

In the first six months of 2015, Buick had a 4.3% improvement while Chevrolet posted a 0.6% rise in deliveries. Meanwhile, a 5.5% drop was recorded by the low-cost Wuling brand.

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