Manufacturing News

GM China sales rose 21% in May on strong sales of microvans

General Motors said vehicle sales in China last month increased 21 percent, boosted by demand for its Wuling microvan and Chevrolet sedans.

Deliveries of cars and minivans rose to 231,183 units in May from 190,674 units a year earlier, GM said Tuesday.

SAIC-GM-Wuling, the joint venture that makes low-priced microvans used to transport goods and people, boosted deliveries by 36 percent to 127,749 units.

General Motors is "on track" to meet its China sales targets and outperform the industry this year, said GM China President Kevin Wale in an interview last week.

"Our numbers internally are looking pretty solid," said Wale in a May 31 interview in Shanghai. "We're going to do a bit more than the market growth."

Wales said China's vehicle market would recover in the second half of the year as first-time buyers return to showrooms.

GM's results eased fears that an industrywide slowdown in China will worsen. Through April, industry sales of passenger vehicle sales rose only 1.9 percent, according to the China Association of Automobile Manufacturers.

Buick, Cadillac struggle
Even so, GM actually sold more vehicles in the U.S. than in China last month, due to slow sales of Buick and Cadillac in China.

Sales at Shanghai General Motors, GM's joint venture with SAIC Motor Corp. that makes Buick and Chevrolet cars in China, rose 7.1 percent to 99,113 units in May. Buick sales fell 1.2 percent and Cadillac sales slid 2.2 percent, contrasting with Chevrolet deliveries, which increased 13 percent.

General Motors' sales last month looked good in part because year-ago sales were weak. In May 2011, GM's sales fell after the removal of government incentives weakened demand.

June sales may be hurt by reports that the central government may re-introduce sales incentives. Car buyers may wait for those incentives, Wale said.

China's cabinet agreed to revive financial incentives for consumers to trade in their passenger cars to help increase demand in the world's biggest vehicle market, a government official said last week. In 2009, China rolled out a scrappage incentive that spurred 49.6 billion yuan ($7.8 billion) in new-car purchases the following year.

Chongqing, a municipality in southwest China with an area the size of South Carolina, already has announced plans to subsidize purchases of vehicles made in the city.

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