GM's sales in China fell in January as production couldn't keep up with demand.
It was the best of times. It was the worst of times … or, when describing General Motors’ sales results in China last month, it was a subpar time.
Sales by GM and its joint venture partners in China dropped 2.4% during January as GM felt the impact of the slowing of the Chinese economy for the first time after years of steady growth.
Conversely, it was the best of times for Ford, as the maker reported record sales growth in China as it continued to benefit from its recent expansion in the Chinese market with sales increasing 19% from a year ago.
Changan Ford Automobile had its best January ever. Imported vehicles including the Ford Edge, Focus ST, Explorer, Fiesta ST and Mustang increased sales by 18%. Mustang sales kicked off last month.
GM had reported a 32% sales increase in December and sales had increased 12% for the full year in 2014. But in January, Shanghai GM’s sales in dropped 6.9%, SAIC-GM-Wuling’s sales in China increased 3.5% and FAW-GM’s domestic sales were down 75.6%.
“Shanghai GM’s all-time record sales in December resulted in fewer products available for dealers to sell in January,” said GM Executive Vice President and President of GM China Matt Tsien.
“Our production facilities have been working overtime to help meet demand for popular models, such as the Buick Envision, Regal and LaCrosse, and ramping up production of new models such as the Chevrolet Sail 3,” he said.
Buick sales in the domestic market decreased 9.6% but Chevrolet sales in China dropped 2.3%. Cadillac also dropped slightly from January 2014.
(Global auto sales expected near 90 million in 2015. For more, Click Here.)
After two decades of double-digit growth, the Chinese economy is expected to grow at a more moderate pace this year of 7% to 7.5%, posing a challenge for western automakers that have expanded rapidly in China during the past 10 years.
(Click Here for details about the expansion plans in China for GM and Ford.)
China, however, remains the single largest market in the world and sales are expected to reach 25 million units in 2015, leaving established carmakers, such as GM, ample room for profitable expansion, according to Tsien.
(To see why Toyota could lose sales lead to VW this year, Click Here.)
The expansion of GM’s operations in China, where it now trails Volkswagen, has been GM’s single largest strategic success over the past 15 years, a period during which its North American operations were forced into bankruptcy and its European operations downsized.