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Cadillac, Buick help GM to first China sales growth in two years

Stock MarketsOct 12, 2020 05:45AM ET
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© Reuters. FILE PHOTO: The GM logo is pictured at the General Motors Assembly Plant in Ramos Arizpe, Mexico

By Yilei Sun and Brenda Goh

BEIJING (Reuters) - General Motors Co (GM) (N:GM) on Monday said continued market recovery from the COVID-19 crisis helped its China vehicle sales grow 12% on year in July-September, marking the Detroit automaker's first Chinese quarterly sales growth in two years.

The second-biggest foreign automaker in China by units - after Germany's Volkswagen AG (DE:VOWG_p) - said on Monday it delivered 771,400 vehicles in China in the third quarter. That followed a 5% fall in the second quarter, when parts of China were still emerging from virus-busting lockdown measures.

GM has a Shanghai-based joint venture with SAIC Motor Corp Ltd (SS:600104) making Buick, Chevrolet and Cadillac vehicles. It has another venture, SGMW, with SAIC and Guangxi Automobile Group, producing no-frills mini-vans and which has started manufacturing higher-end cars.

Sales rose 26% for cars under its mass-market Buick brand in the third quarter versus the same period a year earlier, while those of premium brand Cadillac jumped 28%, GM said in a statement. Sales of its mass-market Chevrolet marque fell 20%.

Sales of no-frills brand Wuling grew 26%, whereas those of mass-market Baojun vehicles tumbled 19%.

"GM's compact models returned to four-cylinder engines and that helped sales growth," said LMC Automotive senior analyst Alan Kang, referring to an attempt to market cleaner but noisier three-cylinder versions. "Cadillac also has a more complete lineup this year."

China's biggest automakers' association expects overall car sales to grow by double digits in July-September versus a year earlier. Makers such as Toyota Motor Corp (T:7203), Honda Motor Co Ltd (T:7267) and Geely Automobile Holdings Ltd (HK:0175) saw sales jump in the just-finished quarter.

GM has seen its China sales suffer in a crowded market and slowing economy. To revive its fortunes, it plans to have electric vehicles (EVs) make up over 40% of new models in the next five years in China, where the government promotes greener cars.

The automaker's Wuling Hong Guang MINI EV, a micro two-door EV with a starting price of 28,800 yuan ($4,200), was China's biggest-selling EV in August.

GM's sales fell 15% in 2019 from a year earlier to 3.09 million vehicles. The automaker delivered 3.65 million vehicles in 2018 and 4.04 million in 2017.

Cadillac, Buick help GM to first China sales growth in two years
 

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Sunny Chan
Sunnychan Oct 12, 2020 6:21AM ET
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With a better supply chain and logistic, R and D into EV and Batteries, PE ratio of 6.2, this is a company that I will invest over Tesla anytime.
 
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