GM’s China July Sales Down 1.8%

Published on August 6, 2011 by Tycho de Feijter

General Motors Co.’s (GM) China sales and those of its local joint ventures fell 1.8% from a year earlier in July on weak demand for commercial vehicles, it said Friday.

GM’s sales in the world’s largest auto market totaled 173,398 units in July, down from 174,645 in the same month in 2010, it said in a statement. The company reported total sales of 193,878 units in June.

Sales at FAW-GM, a commercial vehicle joint venture with FAW Group, fell 39.7% to 3,353 units, while sales at SAIC-GM-Wuling, a small commercial minivan joint venture with Shanghai Automotive Industry Corp. and Liuzhou Wuling Motors, fell 14% from a year earlier to 77,944 units, the company said.

But industry watchers said abnormally strong sales last year for commercial vehicles painted a misleading picture of the state of GM’s sales and China’s auto market.

“How you need to see (sales of) the minivans is they had very strong growth last year, and the reason why they grew so strongly is because they benefited fully from government incentives,” said Klaus Paur, managing director for Greater China autos at Synovate Motoresearch.

Government policies–like lower purchase taxes on small-engined cars and CNY3,000-CNY5,000 incentives for owners trading in rural vehicles for small minivans–encouraged buyers to move forward their purchasing decisions, eating into demand for the vehicles in 2011, he said.

The decline in GM’s overall sales numbers masked strong growth in passenger vehicles. Shanghai GM, a passenger-vehicle joint venture with SAIC, saw sales rise 14.4% to 91,818 units in July on strong growth in its Buick and Chevrolet brands.

For the first seven months of the year, sales at GM and its joint ventures totaled 1.4 million units, up 4.4% from the same period a year ago, and a record for the company.

Overall China domestic passenger car sales grew 6.2% in the first half of 2011, compared with 3.4% growth for the whole auto industry, according to China Association of Automobile Manufacturers’ data. The association is scheduled to release data on July auto sales next week.

Via: WallStreetJournal.

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