Manufacturing News

GM China sales rise 20% in November while Ford, Honda volumes fall

General Motors reported China sales in November rose at the fastest pace in 10 months, led by deliveries of Wuling light trucks and Buick Excelle sedans.

Deliveries to Chinese dealers last month climbed 20 percent from a year ago to 237,130 vehicles, the Detroit-based company said in a statement. That's the biggest monthly increase that GM has reported since January.

Sales of microvans and sedans at SAIC-GM-Wuling Automobile Co. jumped 40 percent after GM, poised to overtake Toyota Motor Corp. in global annual sales, cut prices of its Wuling trucks. The gains were a contrast to Ford Motor Co. and Honda Motor Co., which posted drops in deliveries last month of 7 percent and 3.3 percent, respectively.

"GM gained a lot of market share from their minivan competitors this year through discounts and a strong reputation," said Marvin Zhu, a Shanghai-based analyst at researcher LMC Automotive. Wuling's quality and service is perceived to be better than other local brands, Zhu said.

For the first 11 months of 2011, GM's deliveries increased 8.2 percent to 2.4 million in the world's largest automobile market. Still, that's a slower rate than in 2010, when sales climbed 29 percent. Industry sales in China lost momentum after the government raised the sales tax on small cars and phased out rebates for rural buyers in January.

GM aims to expand its luxury car and sport-utility vehicle lineup to double deliveries in the country to 5 million by 2015.

November slowdown
Not all carmakers enjoyed sales growth in November -- another indication that the world's second-largest economy is cooling.

Last week, China's central bank last week cut lenders' reserve requirements for the first time since 2008 to pump money into the financial system.

Ford's China sales fell 7 percent in November to 43,338 units, led by a 19 percent decline in deliveries at its
commercial vehicle joint venture, according to an e-mailed statement.

Honda, Japan's third-largest automaker, said it sold 58,228 vehicles in China last month, 3.3 percent fewer than a year earlier. The Tokyo-based company said deliveries decreased by 8.4 percent to 539,442 units in the first 11 months.

Auto sales in China surged 32 percent to 18.1 million vehicles in 2010, according to the China Association of Automobile Manufacturers. Growth slowed to 3.2 percent during the first 10 months of this year, according to the association, which will report November industry figures later this month.

Chinese auto demand may expand 5 percent to 10 percent in 2012, led by demand for passenger cars, said GM China President Kevin Wale in a Nov. 17 interview. Sales of commercial vehicles probably will grow 5 percent, he said.

Strong microvan sales
GM is banking on China to offset a shrinking market in Europe, where researcher IHS Automotive estimates car demand will fall 1 percent in 2012, the fifth straight annual decline.

Sales by SAIC-GM-Wuling, GM's minivan venture with SAIC Motor Corp., rose to 119,133 vehicles, a record for November, according to the statement. The partnership makes China's best- selling vehicle in 2010, the Wuling Sunshine minivan.

Shanghai GM, the U.S. carmaker's sedan venture with SAIC that produces Buick and Chevrolet-branded cars, boosted sales 7.6 percent to 113,120 vehicles. Sales of Buick Excelle passenger cars climbed 25 percent to 23,885 units.

Sales growth at Shanghai GM may slow to 12 percent next year as the automaker faces capacity constraints and few model rollouts, LMC's Zhu said. The passenger carmaker is expected to deliver 19 percent more cars this year, he forecast.

GM's Buick, Chevrolet and Wuling are among the most successful international brands in China, and their dealerships are well-positioned in less-developed cities with high growth prospects, Alexander Potter, senior research analyst with Piper Jaffray Cos., said in a report on Dec. 5.

"When the European debt crisis passes, GM will be well-situated to ride China's growth for at least the next five years," Potter wrote.

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