U.S. automaker General Motors Co. (GM, Financial) said its China operations were strong for the month of March. The company, in collaboration with its joint ventures in China, delivered 345,448 vehicles, up 16% from the same period last year. Not only is this the company’s monthly sales record for March, but also the strongest year-over-year sales rise since August.
As far as first-quarter sales for 2017 are concerned, General Motors sales plunged 5.2% year over year due to a change in the Chinese government’s tax policy. Sales, however, could have been even worse had there not been a 16% sales growth in March and a mammoth 81% rise in Baojun deliveries. The sales improvement is a positive sign and reflection of an uptick in demand.
Here is an insight into General Motors’ performance in China.
GM puts up a good show
General Motors’ record sales for March were powered by the vigorous performance displayed by SUVs (up 45%), MPVs (up 23%) and luxury vehicles. Furthermore, Buick, Cadillac and Baojun sales also registered a March record. A combination of these factors helped the company strengthen its position in the world’s largest car market.
Matt Tsien, GM vice president and GM China president, discussed future plans and expansion in the Asian economy.
"SUVs, MPVs and luxury vehicles will help us further tap into the market's growth potential," Tsien said. "We will continue to expand and upgrade our offerings across segments. Many of our new models will be on display at this month's Auto Shanghai 2017."
By the numbers
Buick China sales in March improved 21% to 88,519 vehicles. By comparison, the Detroit automaker sold less than one-fourth of the volume in the U.S. in the previous month. The carmaker sold 20,959 Buicks in its domestic market. The impressive increase is attributable to sales of Buick GL8, up an astonishing 92%, and solid sales of Buick Envision, which was 16,000 units.
Cadillac sales surged 63% to 12,369 vehicles. March marks the brand’s 13th straight month of double-digit growth. XT5 SUV led the charge from the front and accounted for more than one-third of Cadillac’s total sales. Sales of Cadillac ATS-l and Cadillac XTS surged 58% and 38% respectively.
Baojun, whose sales skyrocketed 81% by selling 81,353 units, was the highlight of the month. A number of factors contributed to Baojun’s mammoth sales growth. One of them was Baojun 510 Small SUV, whose sales totaled 16,443 units in its first full month on the Chinese market. Baojun 310 sales were also impressive as volumes surpassed 10,000 units for the sixth consecutive month. Boajun 730 MPV sales surged 38% to more than 20,000 units.
Chevrolet sales jumped 4.3% to 34,750 units. While Chevrolet Malibu sales rose 54%, Chevrolet Cavalier sales surpassed the 10,000 unit mark for the fourth time since its launch in September. Wuling China sales amounted to 128,501 units as sales of Hong Guang S MPV spiked 22%, selling 46,000 units.
Last word
After witnessing growing sales in the U.S., the auto market has suddenly hit a plateau. Thus, China will be a very crucial market for General Motors going forward. China was the company’s second most profitable region in the fourth quarter. Evidently, the company will empasize strengthening its position in China so as to offset stagnating sales in the U.S. market.
Disclosure: I do not hold any position in the stock mentioned in this article.
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