General Motors (GM, Financial) delivered 273,563 vehicles in China last month, an increase of 11.2% from the same period last year. The company reported sales volume of 1,810,476 vehicles through June, up 5.3% as compared to the previous year. The sales success is attributable to the robust performance of brands such as Buick, Cadillac and Baojun that posted their highest ever sales for June.
Matt Tsien, GM vice president and GM China president, said in a statement: “Sales of the Cadillac luxury brand and Buick have remained strong throughout 2016. We have also seen very high demand for our Baojun entry-level passenger car brand and a return to growth for the Wuling brand.”
Performance snapshot
Cadillac put up a strong show by posting a 34% sales hike in June to 9,552 units. ATS- L, XTS luxury sedan and XT5 luxury crossover each saw sales exceeding 2,000 units. Buick sales, on the other hand, surged 10% to 86,056 units in China. The sales gain was powered by robust demand for Excelle GT sedan, whose sales surpassed the 26,000 units mark. Apart from this, demand for the Envision, the brand’s top selling SUV, spiked 27% to more than 14,000 units.
Chevrolet, however, was the one that witnessed a fall in sales. Deliveries were down 25% to 35,648 units in June as compared to the same period last year. The all-new Malibu XL saw a mammoth 46% sales hike over the previous month. The new Cruze passenger car is all set to be launched this quarter.
Baojun saw its sales more than double to 43,249 vehicles in June over last year. Robust deliveries of two of its bestselling models, Baojun 730 MPV and Baojun 560 SUV, each selling more than 20,000 units, helped it to post incredible sales gain.
Wuling sales surged 8.1% year over year to 99,017 units. Deliveries of the Hong Guang MPV family exceeded 30,000 units. Moreover, sales of Rong Guang V minivan spiked 20%.
GM’s rival Ford (F, Financial) also witnessed a sales gain in June. The Blue Oval’s sales climbed 3% to 85,105 units. Ford’s year-to-date sales surged 5% year over year to 564,647 units. The luxury brand Lincoln saw strong sales increase. Deliveries almost tripled in the first six months of the year as the company sold 12,450 Lincoln vehicles. For the first half year, Ford’s midsize crossover SUV surpassed the 50,000 mark, whereas Ford Explorer sales spiked a mammoth 50% to 6,884 units.
GM bullish on China
Growth in the Chinese economy has slowed over the past couple of years. This became a point of concern for General Motors as China happens to be the automaker’s largest auto market as far as sales volumes are concerned. China is also the second most important market for the company after the U.S. as a profit generator.
The Chinese government’s initiative to reduce the purchase tax for vehicles with engines up to 1.6 liters helped the automaker see a rebound in sales. The company was able to close 2015 on a positive note by selling 3.6 million vehicles. Though sales in the first quarter of 2016 was soft, General Motors experienced a strong rebound in the second quarter, helping the company report 5.2% sales growth in the first half of the year.
Disclosure: I do not hold any position in any of the stocks discussed in this article.
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