GM is locked in a battle in China with Volkswagen Group for sales leadership.
General Motors Company and its joint ventures in China announced today that domestic sales of 1,826,424 units sold in 2009 resulted in a year-end market share record of 13.4%. It was an improvement of 1.3 percentage points from the end of 2008.
The results provided confirmation of sorts for taxpayer bailout defenders, including the U.S. Auto Treasury Task Force, which asserted that the insolvent company was worth saving last year because of its global footprint and ongoing success in Asia that currently eludes it elsewhere.
As the result of a combination of a large population, ongoing Communist government investment in crucial transportation infrastructure projects, and extremely effective government stimulus programs during the Great Recession, the Chinese auto market is now the world’s largest. Chinese government policy also requires that automakers form partnerships with Chinese companies so that jobs and profits stay in China.
The U.S. is the only major industrial country in the world that does not have a policy to protect manufacturing jobs in any industry, let alone the auto industry where each car company job has a multiplier effect of 10:1 in the latest study from the respected Center for Auto Research.
GM is locked in a battle with Volkswagen Group and Toyota global for leadership, although VW – profitable and growing through acquisitions – seems to be in a better place right now than loss-making Toyota, as well as money losing GM, which as recently as two years ago was the global auto market leader. As of the end of the third quarter of 2009, VW was solidly in third place, with 4.8 million sales. Toyota reported 5.6 million, GM 5.5 million. Final sales results will not be in until much later this month.
Sales of Buick and Chevrolet vehicles were strong during a year, as were sales of joint venture models from SAIC-GM-Wuling. This positive result came during a year that that most other automakers would rather forget or downplay, including GM when its slumping U.S. sales results are announced tomorrow.
“We are proud of our performance in 2009,” said Kevin Wale, President and Managing Director of the GM China Group.
In 2009, GM and its Chinese JVs introduced several new and upgraded models, including the new Buick LaCrosse and the New Regal turbo series, which will debut in the U.S. next summer; the Chevrolet Cruze delayed in the U.S. until next fall; and the new Cadillac SLS and SRX.
GM and its joint ventures continued increased investment in China throughout the year as it contracted elsewhere.
Shanghai OnStar initiated in-vehicle safety, security and communication services and enlisted its first subscriber in China on December 20.
In addition, the GM China Science Lab was launched and it SAIC joint venture, Pan Asia Technical Automotive Company, opened its new vehicle safety lab. Shanghai GM broke ground on China’s largest proving ground in Anhui province, SAIC-GM-Wuling opened a new engine plant in Qingdao, and GM China moved to new offices in Shanghai, sharing space with the GM International Operations headquarters and the Center for Advanced Research and Science.
In the middle of the year, GM launched a new partnership with FAW, FAW-GM, which gives GM a presence in the booming light commercial vehicle segment. In December, GM and SAIC Motor announced the establishment of a new 50-50 joint venture investment company, General Motors SAIC Investment Ltd., to capture business opportunities in Asia’s emerging markets, including India. Although the cash strapped GM had to give controlling interest in its senior SAIC joint venture to the communist owned company, a symbolic, if not an actual business setback.
Record Buick, Chevrolet and Wuling sales
Domestic sales by Shanghai GM rose 63% to 727,620 units in 2009. The passenger car joint-venture was once again led by its original brand, Buick, which experienced sales growth of 60% year-on-year to 447,011 units. The Excelle, sold 241,109 units, and remained the brand’s bestseller for the sixth consecutive year. Further contributing to the resurgence of Buick in China were the new Regal, which generated sales of 79,930 units, and the new LaCrosse, which generated sales of 43,429 units in its six months on the market. It is hoped that versions of those cars in 2010 will turn around slumping U.S. Buick sales.
Chevrolet sales in China were 332,774 units sold – an increase of 67% from 2008. The Cruze, GM’s new global compact car, enjoyed great success in China, with sales of 92,190 units in nine months. In addition, the Lova had sales of 118,935 units.
In 2009, SAIC-GM-Wuling became the first automaker in China to sell more than 1 million vehicles in a year, increasing its domestic sales by 63% to 1,061,213 units. With sales of 596,630 units, the Wuling Sunshine set a Chinese industry record for annual sales by a single model. During their heyday Oldsmobile Cutlass and Buick Regal sales used to be at similar or greater levels in North America.
FAW-GM sold 34,510 light commercial vehicles in the four months after its establishment in August 2009; and began construction of a new assembly plant in Ha’erbin.
Wale is optimistic about the 2010 outlook. “Despite the sales records in 2009, it looks as if 2010 will be even stronger. The industry outlook is strong and we expect more growth, albeit on a somewhat slower pace. It is our intent to keep up with that growth and make sure we defend our leadership position.”