General Motors (GM, Financial) in collaboration with its joint ventures in China sold 295,282 units with an impressive 16.9% sales gain on the back of robust demand for SUVs, MPVs and luxury vehicles. In addition to this, the passenger car market also saw gains in China where Buick Excelle GT was among the popular choices of the country’s population. Brands like Buick, Cadillac and Baojun posted record deliveries for the month of May. Here’s a look at the company’s performance in China.
By the numbers
Cadillac, Buick and Baojun each posted great numbers with sales surging 30% to 8,568 vehicles, 61% to 100,864 vehicles and 80% to 43,515 vehicles. Cadillac’s performance in China has been nothing short of successful. Both XTS and ATS-L luxury brands sold more than 2,400 units each. The sales of XT5 luxury crossover stood at 1,449 units in its first full month after its launch.
Cadillac sales volume may still be far behind that of the three German heavyweights, but it’s remarkable. It is fairly clear that the largest American carmaker has long-term plans for Cadillac in China as it senses the economy’s strengthening demand and growing inclination toward luxury vehicles. General Motors is witnessing a positive response for its crossovers and the XTS sedan. Apart from this, Baojun has also churned a good number with its sales success attributable to high demand for 730 MPV and 560 SUV.
However, it was not all rosy for the Detroit automaker. Some of the company's brands witnessed a downfall. Chevrolet saw declining sales, down 24% to 38,114 vehicles. In contrast, sales of Malibu XL climbed 37% year over year. Wuling sales plunged 5% year over year in China to 104,170 units due to the poor performance in the minicommercial market.
On the whole, year-to-date sales for General Motors surged 4.3% by selling 1,536,913 vehicles. Though results varied among General Motors’ various brands, Matt Tsien, GM China’s chief, is happy with the overall performance of the automaker and stays focused on its plans for the economy. He said, "GM vehicle deliveries in China achieved robust growth in May." Tsien added, "While demand for our SUVs, MPVs and luxury vehicles remained strong, we also saw impressive demand for passenger car models such as the Buick Excelle GT."
Driving growth ahead
General Motors battles with the likes of Ford Motor (F, Financial), Toyota Motor (TM, Financial), Volkswagen (VLKAY, Financial), Tesla Motors (TSLA, Financial) and the domestic Chinese automakers in China. The company fiercely competes with Volkswagen to hold the top spot as the largest foreign carmaker in the market. General Motors’ impressive comeback in the Chinese auto market should help the company deliver strong results in the second quarter. The company’s performance was backed by high sales of its SUVs and the lately refurbished Excelle GT. The company has a strong portfolio with a huge range of vehicles from passenger to commercial, which should help it effectively fight Volkswagen.
Apart from fighting competition, General Motors also believes in investing in technology. Recently at the National Intelligent & Connected Vehicle Test Demo Base held in Shanghai, the company showcased the vehicle-to-vehicle (V2V) technology. The company asserts that the technology will help address different challenges that the auto industry witnesses, ranging from safety to mobility. General Motors also said the technology would have Emergency Brake Alert and Intersection Collision Alert. The automaker is among the pioneers in introducing such groundbreaking technology in the emerging market of China.
General Motors has finally started enjoying improving volumes in China with the sales chart trending upward in May after a period of dull numbers. The company expects to see better volumes ahead given its wide range of offerings with investments in technology.
Disclosure: I have no positions in any stocks mentioned in this article.
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