General Motors (GM, Financial) reported an impressive 7.5% sales gain in China by selling 277,979 vehicles in April due to solid sales growth of SUVs and premium cars. The Detroit carmaker has been able to bounce back strongly after a sales decline in March.
In contrast, the American automaker’s crosstown rival Ford Motor (F, Financial) witnessed a sales slump of 11% year over year. Ford’s auto sales decline in China for the month of April was a major setback. It has been reported as the company’s steepest decline since it began reporting monthly retail numbers instead of wholesale volumes in May 2015. However, both companies saw great demand for high-end crossovers and SUVs.
A comparative study: Ford and General Motors in China
SUVs have been a bright spot for both U.S. automakers. General Motors along with its Chinese joint ventures witnessed a mammoth 107% growth in SUV sales powered by the premium Buick Envision and Baojun 560, both witnessing a 56% sales rise.
Despite posting positive results in China, General Motors found some of its key brands under pressure. While Chevrolet sales dropped a massive 29%, Wuling sales plunged 14% in April as compared to the last year. However, the company’s product portfolio is so broad that poor performance of some of its brands didn’t overshadow the strong sales of other brands that supported the company to report growth.
Matt Tsien, GM China president, said in a statement: “GM continues to grow in segments that are on top of customers’ purchase lists. We have more new vehicles on the way in the SUV, MPV (multipurpose vehicle) and luxury segments to keep delivering to customers what they want and demand.” The company is planning to launch 13 new and revamped models in China this year to further strengthen its position.
As far as Ford is concerned, the combined sales of its five SUV models, selling in the mainland, surged 27% for the first four months of the year. When asked about Ford’s sales slump in China for April, a company representative said, “China continues to be a dynamic marketplace as it transitions from an industrial economy to a consumer-led economy,”
Year-to-date sales of Ford China climbed 7% from the same period a year ago to 391,294 vehicles. Ford currently operates through two joint ventures in China, namely Changan Ford Automobile and Jiangling Motors. The passenger-vehicle venture of CAF declined 11% year over year to 58,802 vehicles. JMC’s commercial-vehicle venture also witnessed a 7% drop in sales in April to 22,165 vehicles.
In an auto show in Beijing, John Lawler, Ford China chief, said the company has a full-fledged plan of introducing more electric vehicles in the Chinese market especially the hybrid edition of Mondeo sedan and the plug-in hybrid C- Max Energi. Besides, the company is also planning to import its well-established and high-performance F-150 Raptor. It is estimated that sales volume of F-150 Raptor might not be huge but its presence in China will be a test on how well it flows with the changing preferences of the Chinese population and manages to attract customers. The Blue Oval is taking this step to assess whether China is a ready market for mainstream pickup models.
Last word
General Motors continues to be in a dominant position in China. The company enjoys the broad range of its product portfolio which helps it to offset the weakness of underperforming product segments, which was reflected in April. In contrast, Ford is a much smaller player in the country as it entered the Chinese market late. Though Ford experienced soft numbers in April, the company has long-term plans to capitalize on the growth potential of China.
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