Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

GM's sales drop in August highlights automaker divide in China

Published 09/07/2015, 05:24 AM
Updated 09/07/2015, 05:24 AM
© Reuters. An employee looks on next to an assembly production line of Buick cars at a General Motors factory in Wuhan

© Reuters. An employee looks on next to an assembly production line of Buick cars at a General Motors factory in Wuhan

By Jake Spring

BEIJING (Reuters) - General Motors Co (N:GM) reported on Monday its biggest drop in China sales in five months for August as global automakers struggle with a deepening economic slowdown and slumping equities in the world's largest auto market.

Vehicle sales for GM and its joint venture partners fell 4.8 percent year-on-year in August, while Ford Motor Co (N:F) and Nissan Motor Co Ltd (T:7201) also reported contracting sales for the month, highlighting the divide between winners and losers in the Chinese market.

The figures contrast sharply with last week's major sales gains for Toyota Motor Corp (T:7203), Honda Motor Co Ltd (T:7267) and Mercedes maker Daimler AG (XETRA:DAIGn) in China, demonstrating the importance of having fresh, in-demand products to entice buyers.

China's economy is forecast to grow at its slowest pace in a quarter of a century this year. Mainland stock markets have tumbled roughly 40 percent since mid-June after a sharp run-up that began late last year.

Mercedes offers a fresher lineup than key luxury competitors in China, having revamped many of its models more recently than Audi AG (DE:NSUG) and BMW AG (DE:BMWG) and helping to lift its deliveries last month by 53.1 percent.

And in the past year, Honda and Toyota have released hot-selling sports utility vehicles (SUVs), a segment that IHS Automotive predicts will grow by more than 20 percent this year in defiance of the auto market's slowdown.

Automakers like GM are now trying to play catch-up.The U.S. automaker launched a new SUV in July under its Baojun budget brand, but the marquee's nearly three-fold sales growth year-to-date hasn't been enough to lift the company's relatively flat 2015 sales.

The sales numbers of GM, Ford and Nissan bode poorly for overall market sales in August. Industry sales for the January to July period were up only 0.4 percent on a year-on-year basis, according to the China Association of Automobile Manufacturers (CAAM). CAAM is set to release August data on Thursday.

In July, CAAM slashed its sales growth forecast for 2015 by more than half to 3 percent, saying the stock market crash depressed consumer sentiment.

© Reuters. An employee looks on next to an assembly production line of Buick cars at a General Motors factory in Wuhan

Volkswagen AG (DE:VOWG_p) is the top-selling passenger car maker in China with roughly 18 percent market share in 2014, followed by GM and Hyundai Motor Co (KS:005380).

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.