Filed under: China, GM, Volkswagen, Earnings/Financials
GM still outpacing industry in China - sees 47% sales growth in 1st half
General Motors overtook Volkswagen last year to become the sales leader in China and hasn't looked back since. In the first half of this year, GM's sales in China have increased by 47 percent versus last year to 453,832 units. Volkswagen also saw a gain of 30.2 percent with vehicle sales totaling 345,375 through June. GM sells Chevy, Cadillac and Buick badged vehicles in China, while Volkswagen sells vee-dubs and Audis. Both companies have a partnership with Shanghai Automotive Corp. Group, China's most profitable automaker. While the Chinese market is very important to GM and continues to grow at an incredible rate, the U.S. still remains the General's bread-and-butter. While Chinese sales for the first half of this year grew to 453,832 units, sales in the U.S. just for the month of June were 413,473 units. The day is quickly approaching, however, when China's demand for the automobile will rival and then likely surpass our own.
[Source: Reuters]
Reader Comments (Page 1 of 1)
Michael Karesh 12:14PM (7/05/2006)
I thought GM's growth was lagging the others in China recently after a few strong years. Guess not.
An exec I knew while performing research within GM is now Director of Vehicle Sales, Service and Marketing for GM China. She's one of the most talented people I encountered within that organization, and her assignment to the China position indicates the priority GM places on that market.
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perry 12:16PM (7/05/2006)
hah, i think this is the only benifit for GM from buying Daewoo. While selling Daewoo as Chevy(Euro) and Holden(Oz) is killing their brand equity slowly, China is the only market that does not mind buying a cheap korean Buick.
Oh yeah, almost forgot, GM is selling a re-bodied Saab 9-3 as Caddy BLS(FWD) in Europe... what a way to treat a legendary American brand!
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Sugar's dad 12:35PM (7/05/2006)
Toyota will never be No 1, with GM's success in China. And the Chinese aren't really big on Japanese products, Toyota has not been big in China just as they have not been big in Germany. Toyota does best in Japan and the US. With Daewoo GM has suddenly become a force in Korea, with sales of 1.6 million Daewoo's expected this year, suddenly Daewoo is making a fine little product.
Nissan and Renault have a lot to gain by an alliance with GM, that is excess to many markets in which they presently have no access.
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Sugar's dad 12:38PM (7/05/2006)
The picture above is a Buick.
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beaker 12:40PM (7/05/2006)
What the article forgot to mention was that while GM sells more vehicles in the US, it actually makes money on the vehicles it sells in China!
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Michael Karesh 12:43PM (7/05/2006)
Sorry, but even continuing rapid increases in GM's China sales won't be enough to counter Toyota's gains worldwide. Toyota is doing increasingly well in Europe.
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Vinny 12:46PM (7/05/2006)
Beaker (#4):
Is that because there is no unions to pay? Granted, China is the extreme in low pay but then, that's why everything is made in China these days.
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Sugar's dad 12:57PM (7/05/2006)
5. Sorry, but even continuing rapid increases in GM's China sales won't be enough to counter Toyota's gains worldwide. Toyota is doing increasingly well in Europe.
Posted at 12:43PM on Jul 5th 2006 by Michael Karesh 0
Watch and see, China will be the worlds largest market in less than 10 years. Unless there is a drastic change Toyota will have little of that market.
Are you saying that GM is not doing well in the rest of the world? Because if you are you are dead wrong, GM is doing well in Asia(with the exception of Japan, and that is no accident) and is far ahead of Toyota in South America and Canada.
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Mr. Oblong 1:15PM (7/05/2006)
At least these piece of junks are selling somewhere.
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beaker 1:50PM (7/05/2006)
Re: #6
No doubt, it is because GM doesn't have the overbearing legacy costs that it has in the US. But, they are also able to sell their vehicles for what they're worth, without having to discount. An article published last year (can't remember which mag) told how up-and-coming Chinese young professionals spend CASH on new Buicks, a status symbol there.
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PJ 2:37PM (7/05/2006)
I'm glad to see GM doing so well in another market, but they've got to be careful not to rest on their laurels.
For the moment, given the nascent state of the Chinese auto industry, Buick of China's offerings look pretty good. They sell the old Regal and Venture we used to get in the States, the Suzuki Forenza and Reno (rebadged, of course), and a couple of larger Daewoo sedans.
When other automakers start entering the Chinese market en masse, however, competition will expose many of these cars as aging, outdated designs. Chevrolet of China (which also sells mostly old-ish Daewoos) will be in a similar situation. These companies enjoy an enviable perception of prestige among the Chinese public, but that'll only last so long if they don't update their offerings.
Hopefully, GM's learned from its current quagmire in the States--playing the value card only goes so far, and you've got to have product. The up-to-date Cadillac, Saab, and Opel offerings will help, but they're priced way beyond the reach of most Chinese consumers. Still, if GM can keep its product releases in step with the new brands entering China, I'd like to hear some good news for a change.
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Michael Karesh 5:16PM (7/05/2006)
It's still very early in the game in China. Does anyone really believe Toyota won't end up with a large share there? If nothing else, they can afford to buy share wherever, whenever.
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Richard Warren 6:25PM (7/05/2006)
#10 I think Toyota will end up with an ok share, but there is a LOT of history to get past with Japan and China. That has and will take some time to get past.
So, in answer to your question, I don't believe they will end up with a large share for quite some time.
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Howard Kerr 8:45PM (7/05/2006)
My feeling is that once GM reaches a certain growth point (market share of ___%), it's partners will find a way of easing GM out.
China will be a short term win for non-Chinese automakers, then when China makes cars that sell in decent volumes in foreign markets all those joint ventures will finally disappear. Legally or non-legally.
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David 11:15PM (12/22/2006)
Clearly, we've got to move away from private vehicles to better and more frequent public transportation. Does anybody actually believe the world can survive if China has as many motor vehichles as the USA or even more? It is madness to encourage or even admire this misdirected use of resources. I speak as a person who grew up loving and wanting cars but now I find them to be a nuisance and a scourge. I'll take a bus or the subway anyday. Now, why can't we invest funds in those operations instead?
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