BEIJING (Reuters) – General Motors Co’s (GM.N) second-quarter vehicle sales in China fell 12.2%, as the U.S. automaker was hurt by a slowing economy amid the Sino-U.S. trade war and by heightened competition in its key mid-priced SUV segment.
FILE PHOTO – A General Motors sign is seen during the China International Import Expo (CIIE), at the National Exhibition and Convention Center in Shanghai, China November 6, 2018. REUTERS/Aly Song
GM delivered 753,926 vehicles in China in the April-June period this year, according to a company statement. The drop marks the fourth straight quarterly sales decline for GM in China, the world’s biggest auto market.
The numbers from the second biggest international automaker in China by sales portend more uncertainty for the industry which is grappling with the effects of the trade war and is trying to rebound from a downward spiral in sales that led to its first annual decline in more than two decades.
Ford Motor Co (F.N) is expected to announce its quarterly China sales later on Friday.
Sales of GM’s affordable brand Baojun dropped 31.8% during the quarter compared to the same period last year. But luxury brand Cadillac’s sales jumped 36.6% in the quarter.
In China, GM has a joint venture with SAIC Motor Corp (600104.SS), in which the Buick, Chevrolet and Cadillac are made. It also has another venture, with SAIC and Guangxi Automobile Group, in which they make no-frills minivans and have started to make higher-end cars.
GM sold 3.64 million units in China last year, down from 4.04 units in 2017.
China’s factory activity shrank more than expected in June, highlighting the need for more economic stimulus amid higher U.S. tariffs and weaker domestic demand.
Annual car sales in China fell last year for the first time since the 1990s, and the downward spiral is intact this year too. Sales tumbled 16.4% in May from the same month a year prior, the China Association of Automobile Manufacturers (CAAM) said. That marked the 11th consecutive month of decline and followed falls of 14.6% in April and 5.2% in March.
U.S. car companies’ share of China’s passenger vehicles market has fallen to 9.6% in the first five months of this year from 10.9% in the year-ago period, according to CAAM. Over the same period, German car makers’ share has risen to 23.3% from 20.9% and Japanese auto makers’ to 21.3% from 17.3%.
CAAM is set to announce June sales next week, which industry analysts forecast will be negative.
GM and its rivals are launching new models or sprucing up older ones to draw customers. GM has laid out plans to introduce around 20 new models or variants of older ones this year.
“Around two-thirds of the about 20 new and refreshed models will arrive in the second half with a sharpened focus on luxury vehicles and mid-size to large SUVs,” a GM spokeswoman told Reuters, adding more than half of the new launches will be new models.
Reporting by Yilei Sun and Norihiko Shirouzu in Beijing; Editing by Muralikumar Anantharaman