GM Executive Vice President and GM China President Matt Tsien is excited about the continuing growth of sales in China.
With concerns growing about the future path of sales in the U.S., General Motors continues to see growth in China where sales grew 18% in July, according to the latest sales reports.
GM and its joint ventures delivered a July-record 270,529 vehicles in China, taking deliveries for 2016 past 2 million vehicles with the Buick, Cadillac and Baojun brands reaching all-time highs for the month, the company reported.
“GM and our joint ventures managed to top 2 million deliveries in record time, as sales remained strong across many segments,” said GM Executive Vice President and GM China President Matt Tsien.
Tsien told reporters in China this week that GM is “quite bullish” about the recovering auto market in China and is responding to a shift in growth toward utilitarian models in smaller cities, a segment often ignored by other global automakers.
GM expects the market to grow to around 30 million vehicles by 2020 from 24.6 million last year, and that its local budget-car joint venture gives it an edge over global rivals in growth areas outside of major cities, Tsien said.
“And it is going to grow beyond that,” Tsien said, referring to China’s overall auto market. “There will be a point of saturation, but we are probably a decade away.”
GM's sales in China were up 18% in July, including strong sales of the Buick Excelle which were up 30%.
(Some analysts think that U.S. auto sales have hit their peak. Click Here for the reasons.)
China’s auto market has recovered from a mixed 2015 when sales overall fell each month from April through August, to register growth of 14.6% in the latest reporting month of June. But continued sluggishness in gross domestic product (GDP) growth adds unpredictability to the market’s near-term outlook.
Tsien ales have stalled in “tier-one” mega-cities such as Beijing and Shanghai where new license plates are tightly regulated but continue unabated in smaller cities and rural areas where drivers favor basic, affordable cars – the kind of low-margin vehicles foreign automakers have largely neglected.
“Tier-one is near saturation,” said Tsien. “But when you go into tier-three and -four cities, we saw double-digit growth for the whole of last year. It’s still growing at double-digits this year and will continue.”
During July, Cadillac deliveries in July jumped 90% year over year to 8,757 units. Demand for both the ATS-L luxury sedan and XT5 luxury crossover topped 2,600 units, while sales of the XTS luxury sedan increased 54% from the same period a year earlier.
(U.S. new vehicle sales sputter a bit in July. For more, Click Here.)
Buick deliveries in July totaled 89,404 units, an increase of 30%, led by the Excelle GT and Envision.
Baojun, one of the no-frill brands cited by Tsien, delivered 44,320 units, a gain of 61% year over year. Demand for the Baojun 730 MPV was up 23% from the previous July, while sales of the Baojun 560 SUV more than tripled.
Wuling deliveries experienced year-over-year growth for a second consecutive month, increasing 6% in July to 97,728 units despite the challenging market environment of the mini-commercial vehicle segment.
(Click Here for details about Jaguar, Land Rover and Volvo gaining on the luxury leaders.)
In the first seven months of 2016, GM and its joint ventures’ deliveries in China increased 6.8% year over year to 2,081,005 units.