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Thread: GM Sells 70% More Vehicles in China than the US

  1. #1
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    Default GM Sells 70% More Vehicles in China than the US

    GM Sells 70% More Vehicles in China than the US

    by Wolf Richter • Dec 5, 2017

    Big Risks, Thin Profits. US taxpayers helped.

    In China, General Motors is hot. In November, its 10 joint ventures and two wholly-owned foreign enterprises sold 418,225 new vehicles in China, up 13% from a year ago. It was the best November ever, GM said. SUV sales soared 73%.
    By comparison, in the US, GM sold 245,387 new vehicles in November, it reported a few days ago, down nearly 3% from a year ago. In other words, in November, GM sold 70% more vehicles in China than in the US.
    China became the world’s largest new vehicle market for the first time in 2009, when sales in the US plunged. For years, growth rates in the Chinese market blew the doors off the US market. But the hectic pace has recently subsided. For 2017, deliveries are expected to rise only 2%, and competition from local automakers is getting tougher.
    Buick is still hot in China – though it’s just about moribund in the US, where deliveries fell 3.5% year-over-year in November to just 16,833 vehicles, accounting for only 7% of GM’s total sales in the US. Of them, 2,228 were the China-made compact SUVs, the Buick Envision.




    In China, Buick is still the fourth largest auto brand with a market share of just under 5% so far this year, behind Volkswagen, Honda, and Toyota. In November, GM sold 112,738 Buicks, or 27% of its total sales. But for the month, Buick was already outsold by GM’s Baojun.
    Baojun is the hottest brand GM has in China. Sales of the bargain-priced vehicles soared 52% in November to 113,711 units, accounting for over a quarter of GM’s total sales in China.
    GM launched Baojun in 2010, after the “New GM” had emerged from Chapter 11 bankruptcy in the US in July 2009, with Debtor in Possession (DIP) financing and equity investments from the US taxpayer. This support helped GM go on an investment spree in China, and, along with its joint-venture partner SAIC, plow $2.4 billion in the Baojun factory in Liuzhou, even as many former GM plants in the US had been shuttered and were disposed of in bankruptcy.
    But GM owns only 44% of Baojun. With technology transfer to SAIC being a big part of the deal, this is a risky proposition. The Wall Street Journal:
    Other foreign auto makers “are consistently taken aback by GM’s apparently generous technology sharing” when it comes to Baojun, said Michael Dunne, a former GM executive and now president of Dunne Automotive, a consultancy. “The open approach has engendered considerable goodwill but it also leaves GM vulnerable to the whims of its powerful Chinese partner.”
    GM was less proud of its brand Wuling. It sold 113,919 units. GM does not brag about the year-over-year change in deliveries, as it does with Baojun. In fact, in the press release, there is no mention of this year-over-year change. Turns out, a year ago, GM had reported 121,566 sales in November. In other words, Wuling sales dropped 6.3% year-over-year.
    Nevertheless GM gushed, while purposefully leaving out Wuling: “GM’s performance was strong across its brands. Baojun deliveries reached an all-time monthly high, while Buick, Cadillac and Chevrolet set November sales records.”
    China-sold Buicks, Cadillacs, and Chevrolets are built by a 50-50 GM-SAIC joint venture. These vehicles tend to be more upscale than GM’s Chinese brands.
    For the first 11 months this year, GM sold 32% more vehicles in China than in the US, with 3,549,087 units in China, up 3.3% year-over-year, versus 2,691,493 units in the US, down 1.2%, according to Autodata. 2017 will be the sixth year in a row when GM’s vehicle sales in China exceeded those in the US.
    But it’s complicated. These are joint ventures, margins in China are thin, and in terms of profits, GM’s China operations don’t contribute all that much. For the year 2016, GM booked global profits of $9.4 billion, of which GM attributed only $2 billion to “equity income” at its joint ventures in China despite all the massive in vestments in China. Most of the remainder of its global profits came from its sales in the US, and mostly from the fat profit margins on pickups and SUVs.
    Then there’s Tesla, with a market capitalization not much behind GM’s despite minuscule vehicle sales. This is where hype goes to die. Read… Carmageddon for Tesla

    https://wolfstreet.com/2017/12/05/gm...han-in-the-us/
    ”The trouble with socialism is that you eventually run out of other people's money.” - Margaret Thatcher


  2. #2
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    Perhaps this is true because real Americans don't like cheap Chinese crap!

  3. #3
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    I read that Two Years ago~!! If GM had not been feeling Buicks in China Even the Buick would have been GONE~! Old news for sure GM is selling big time in China. That is the only reason they are still around to, especially the Buick name. LOL

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