General Motors reported it sales in China dropped by 9.3% during February, reversing the sales gain the automaker reported during January and feeding the anxiety felt around the world about the outlook for the Chinese economy in general.
GM blamed the decline on seasonal factors, notably the early start to the Chinese New Year holiday, which shuts down commerce throughout China. But with concerns about the path of the Chinese economy rattling markets around the world, the decline in February is bound to feed the anxiety over future auto sales in China, which is now the world’s largest market.
GM executives have predicted that new vehicle sales in China, where the automaker ranks just behind Volkswagen in total sales, would grow modestly 2016.
“This year we will continue to improve our product mix to meet the fast-changing customer demand,” said GM Executive Vice President and GM China President Matt Tsien.
“We are on track to execute our product launch plans. New models, including the Cadillac CT6 and Chevrolet Malibu XL, are expected to add to our growth momentum.”
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Any further downturn in Chinese sales could serve to undermine investor confidence in GM’s ability to raise the price of shares of GM’s common stock.
During February, GM and its joint ventures delivered 245,690 vehicles in China, falling 9.3% last month from the previous February in the wake of slow seasonal sales during and after the Chinese New Year holiday – which came earlier this year.
However, GM’s SUV deliveries were up 115% last month from the same period a year earlier, led by the Buick Envision and Baojun 560.
Buick deliveries in February advanced 16% from a year earlier to 70,764 units, a record for the month. Excelle GT and Envision led the growth with deliveries of the Envision nearly doubled last month from a year ago.
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Baojun, the brand and its partners created specifically for the Chinese market, delivered a February record 39,348 units in China, an increase of 52% year over year. The Baojun 730 MPV and Baojun 560 SUV were among the best-selling models in their segments.
Cadillac deliveries last month declined 16% from a year earlier to 4,766 units. Deliveries in the first two months were a record for the brand in China.
Cadillac launched its new top-of-the-range CT6 prestige sedan on Jan. 27. As the first model being manufactured at the new Cadillac plant in Shanghai, the CT6 incorporates cutting-edge technology and premium amenities.
Chevrolet deliveries in February dropped 48% year over year to 27,349 units, primarily due to continued contraction of the small-car segment, which affected the Chevrolet Sail. Chevrolet launched its new flagship sedan, the Malibu XL, at the end of February.
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Wuling deliveries in the domestic market were 103,438 units, 18% lower than in February a year earlier. The brand was impacted by seasonal factors around the Chinese New Year holiday and continued contraction of the mini-commercial vehicle market.