General Motors China sold 277,979 vehicles last month as sales rose 7.5 percent for the year. The strong April numbers, coming after a disappointing March, were driven in large part by strong SUV sales. GM China President Matt Tsien indicated that General Motors expects to launch additional SUVs designed for the Chinese market in the coming years. Overall SUV sales are up 107 percent since April 2015.
In addition to strong sales of SUVs, General Motors has seen great success as of late. General Motors Co, the biggest foreign automaker in China, said deliveries in the nation rose 15 percent last month, led by demand for its Wuling minivans. Deliveries of cars and minivans rose to 199,503 units in July, according to a statement on the automakers website. Sales at SAIC-GM-Wuling Automobile Co, the venture that makes Wuling mini-commercial vehicles, climbed 27 percent to 98,694 units last month, according to the statement. GM said on August 2 net income margins in China fell in the second quarter as a significant share of its sales growth came from less-profitable mini-commercial vehicles that include the Wuling minivan, whose retail price starts at 34,000 yuan (US$5,336). For the first seven months, GMs total sales to dealerships rose 12 percent to 1.62 million units.
They are increasing sales in the Chinese luxury car market. Led by Cadillac and especially Buick, which has come to be seen as a status symbol by upper class Chinese, GM’s luxury lineup has been designed especially for the Chinese market and has grown substantially in market share over the past several years. Buick sales have risen 56 percent this year while Cadillac, a relative newcomer to the Chinese market, has seen sales increase 13 percent on the year. The recent release of the Cadillac XT5 crossover boosted sales in the country and Cadillac division chief Johan de Nysschen has indicated that the Chinese market will be integral to Cadillac’s rebranding going forward. In the coming months General Motors plans to release 13 all new vehicles to help raise sales even further.
While GM has seen impressive sales figures this year on the back of successes in the SUV and luxury car markets, Chevrolet sales in China are down 29 percent last month. This may signal trouble for General Motors in competing in the small cars segment of the Chinese market where the company faces many more competitors.
Source: The Detroit News
Throughout the past two weeks, we have spent a significant amount of time discussing the differences in the US and the rest of the world in that Americans tend to prefer SUVs and light trucks as opposed to cars. I was wondering if fertility rates around the world affect the preference for larger or smaller cars at all, and did a little bit of research.
China: 1.55 kids per woman
US: 1.9 kids per woman
UK: ten years ago was 1.56, but now is 1.84
France: 2.0
Italy: 1.4
Obviously this research is very cursory, and there are certainly more factors to consider, but it is interesting to consider that the fertility rate in different countries may affect the preferences for car size. If this assumption were true, perhaps China’s growing preference for SUVs (from GM) is indicative of an increasing fertility rate, or as a result of an increasing fertility rate.
Murray asks a good question. The market in Thailand is (was?) affected by the purchase of vehicles for use by extended families rather than narrow nuclear family households. This led to strong sales of large pickup trucks, one of the few places outside the US/Canada where they sell well. But to my knowledge SUVs are proving popular everywhere, including low-fertility markets such as Korea and also Japan [which has a distinctive if not unique regulation-driven “kei” minicar segment].
This article is interesting because it shows the strength of the market for American automobiles in China. Many Chinese consumers want to purchase GM and Buick vehicles because they enjoy the cultural value fo having an American car. This post highlights the global nature of the auto industry.
Thomas Barnett
Quite frankly, I doubt that purchasers think of a Buick as an “American” car. All are produced in China, most are styled in China, and some are engineered in China, albeit off of a global platform. Lots of Americans don’t associate Honda with Japan.
It is interesting to see how U.S. auto manufacturers have managed to brand their subsidiary lines, specifically Buick, in a dramatic fashion when compared to domestic markets. In the U.S. a Buick is considered an upper to mid-range luxury line-up. Here it is generally not associated with being a status symbol or even a high-end luxury vehicle. It seems that by seeing initial success with the Buick line in China, GM has capitalized on this and branded the Buick as something much more upscale than what it is considered in the U.S.
Branding in the US is also affected because GM got rid of Pontiac and of Oldsmobile. At one time you had Chevy – Pontiac – Buick – Oldsmobile – Cadillac, plus Hummer and Saab and Saturn. It’s natural that there’s some movement upmarket in Buick, whose identity was muddied by GM management in the 1980s and 1990s..