General Motors (GM, Financial) reported its sales number in China for the month of October. While the Detroit automaker was glad to declare that this was its best ever October in the country, the company also noted that the sales growth rate in the emerging nation had mellowed down to 3.2% compared to a year ago. October sales ticked up be a marginal amount over last year, causing a bit of concern. The company makes vehicles in this Asian market in collaboration with China FAW Group and SAIC Motor. What happened during the month? What were the numbers? Let’s get all the answers below.
2015 Regal, Picture from Buick
Analyzing the numbers and more…
The American automaker along with its joint ventures in China dispatched 291,371 vehicles during the month, helping the company see the best October to date. In comparison, the preceding two months saw phenomenal growth. September sales grew 15.2% year on year while August sales were up 14% over the previous year comparable period. The company has sold 2.87 million vehicles through October this year, which is 10.7% higher than last year same period.
General Motors offers a wide range of passenger and commercial vehicles in this market. The various brands that its sells here include Buick, Cadillac, Chevrolet, Opel, Jiefang, Baojun and Wuling. Domestic sales of Shanghai GM's went up 5.6% to 140,357. SAIC-GM-Wuling also registered healthy growth of 4.1% by selling 140,357 units. And finally, FAW-GM delivered 1,486 vehicles. Buick's sales saw strong growth in the mainland. It grew by a good 7.9% to 75,241 units. The following chart shows the details of how GM’s Buick offerings performed during the discussed period.
Sales of General Motors’ Chevrolet brand saw some marginal improvement of 1.7% to 60,000. Cadillac, on the other hand, was spectacular. Sales jumped by a stunning 21.8% to 5,116 units for this brand. The growth is attributable to the XTS and SRX models. The carmaker sold 2,211 XTSs, and 1,767 SRXs. Overall, the monthly figures came in quite pleasant to the company, though the growth rate had come down a bit.
China remains a hot market
China is currently the world’s biggest market for cars. It is the favorite destination of global car manufacturers. However, the growth pace has slowed down a bit. Sales in the last month, though improved, were marginally better. In fact, the September growth rate was the slowest in the past 19 months. Despite this, there’s still enough appetite and room for new vehicles in the country. The general secretary of China Association of Automobile Manufacturers Dong Yang, gave a sales forecast of 23 million passenger and commercial vehicles in China. General Motors has been in the country from a long time, precisely 1908. So if the company’s sales falter, it is somewhat considered a bellwether signaling the trend of the market.
Sensing the growth opportunity and understanding the business prospects of the country, General Motors plans to invest a big sum of $12 billion over a period of four years starting 2014 through 2017. The company desires to ramp up operations here and be part of the nation’s growth story by tapping into the market. China is the most important international market for General Motors, and it’s essential for the carmaker to formulate effective strategies and introduce new models to sustain its stake amid intensifying competition. The company has huge capital investment plans to build five assembly facilities and a couple of powertrain plants.
Parting thoughts
China is a growing market, and a slowdown shouldn’t worry the carmaker. Even if  growth has come in lower than expectation, it offers far better prospects than most of the markets across the globe. And with solid footing in the emerging market, General Motors has a long way to go.
