GM sales slump deepens in China even after cutting prices
BEIJING (Bloomberg) -- Gm reported a second straight month of sales declines in China, its biggest marketplace, despite cutting costs on 40 versions across its Buick, Chevrolet and Cadillac brands.
General Motors Corporation and its own China joint ventures offered 252,567 autos in-May, a fall of 4% from a year before, according to a statement on its web site. The decline was primarily as a result of changeover and phasing-out of older versions, the organization said.
Foreign auto makers came under growing pressure in China as economic growth slows in the world's biggest vehicle market and nearby manufacturers increase market share by providing more low-priced SUVs. Passenger-car sales grew at the slowest rate in five months in April, with most of the growth coming from nearby manufacturers.
"Consumer sentiment continues to be at a low stage, and when 80-percent of your purchasers are first-time purchasers, it's simple to postpone buys," stated Janet Lewis, an analyst at Macquarie Group Ltd. in Hong-Kong. "General Motors isn't at a particularly great spot in its version cycle."
General Motors cut costs in China last month following a drop in deliveries in April. Its joint-venture with SAIC Motor Corp. introduced price cuts of as much as 53,900 yuan ($8,700).
That did not keep Buick and Chevrolet deliveries from falling 13% and 2.2%, respectively. The auto-maker will make more of its Visualize SUV, which offered a monthly report of 11,556 models. Cadillac rose 11%, while revenue for General Motors Corporation's low cost Baojun brand soared nearly fourfold.
For the initial five months, General Motors Corporation's revenue in China climbed 5.1% to 1.47 million automobiles. The organization anticipates annual increase of about 6% to 8%.
"China's car industry is growing in a reasonable rate," stated Matt Tsien, head of GM's China procedures.
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