General Motors (GM, Financial) and Ford Motor (F, Financial) are the top two American automakers vying for greater market share in the U.S. The cross town rivals have a long history of competing with each other to get a stronger hold in their domestic market. As far as the international auto market is concerned, both the automakers are striving to capture greater share of the red hot Chinese market.
However, General Motors has a clear advantage in the world’s largest market and is way ahead of Ford. The reason being, General Motors entered China much before Ford, and has thus established a good margin over its domestic rival in the budding economy. However, Ford has rolled up its sleeves to capitalize on the market’s prospects and make up for the lost opportunity. Here’s a look at how the two Detroit auto giants are stacking up against each other in this Asian country.
General Motors establishes its dominance
General Motors along with its joint venture sold 338,350 units in March in China, up 8% compared with a year ago period. Sales of SAIC-GM-Wuling and Cadillac were all time high. On the other hand, Shanghai GM and Chevrolet recorded the best ever March in the domestic market. Shanghai GM’s sales increased 3.9% to 145,607 units, and SAIC-GM-Wuling’s sales volume improved 16.9% to 192,287 units in the domestic market. Chevrolet sales went up 3.1% to 57,751 units, primarily driven by Cruze that saw 20,892 units in sales. Chevrolet Sail witnessed sales gain of 15.1% to 20,580 units, while Malibu sales jumped 17.1% to 9,622 units in March.
Sales of Buick marginally dropped 0.2% to 78,659 units. The company sold 18,609 Excelle GTs, the newly launched vehicle, and 15,694 units of the original Excelle. Buick SUVs sales saw a staggering rise of 147.8% to 16,700 units.
Ford is expanding its footprint
Ford Motor, in contrast, sold 104,842 vehicles in the country during the month, up 1% over last year. This is less than a third of General Motors’ sales volume in China. However, the Blue Oval is working extremely hard to expand its market share in the country. Ford has poured in billions in China to set up manufacturing units to surpass other automakers such as Toyota (TM, Financial). In February, the second largest American carmaker opened its sixth manufacturing facility in the country, which helped it increase its annual capacity by 250,000 units.
The company plans to launch as many as 15 vehicles in the current year. Besides, Ford officially launched its Lincoln brand in China for the first time last year in November. The 2016 Lincoln Continental, which Ford would begin producing next year, has been designed keeping in mind the preferences of the Chinese population. Later during this month, the company will showcase the Taurus sedan before the Shanghai auto show.
Last word
Both Ford and General Motors want to acquire greater share of the Chinese auto market. Last year, 23.5 million vehicles were sold in the economy. The China Association of Automobile Manufacturers estimates that auto sales should grow about 7% to 25.1 million cars and trucks in 2015. Quite obviously global automakers want to be part of this growth. General Motors’ sales gain has averaged close to 12% in China in the past three years compared with Ford’s 30% for the same time frame. While Ford’s growth might look more attractive, it must be noted that it’s relatively a new player selling much lesser vehicles than General Motors. In contrast General Motors’ witnessing smaller gains, but is way ahead in absolute terms.
General Motors’ got a head start as it entered the market when there were lesser number of players. The company is reaping the benefits of timely entering China. But that shouldn’t bother Ford investors as there is room for growth. Ford’s performance, despite its late entry, has been impressive.
