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Record Sales in May for GM’s Chinese Operations

Joint-ventures are required for access to restricted Chinese market to ensure that jobs are created and profits stay home.

by on Jun.08, 2009

SGMW Product Line

SAIC-GM-Wuling has had strong sales since the Chinese government cut taxes in half.

While bankrupt General Motors is struggling to hold market share in the U.S., its Chinese operations are posting record sales. Its two Chinese joint-ventures achieved sales records in May, as the Chinese economy grew and demand for minivans and cars increased.

GM’s minivan tri-venture with SAIC Motor and Liuzhou Wuling Automobile, sold 100,258 units last month. It was the first time that a Chinese automaker sold more than 100,000 vehicles in a single month.

GM’s joint-venture with Chinese automaker SAIC Motor, Shanghai GM, also saw sales increase more than 50% from a year earlier to 56,011 units in May, primarily from Buick brand sales.

In total GM’s vehicles sales in China were up 75% from a year earlier period to 156,000 vehicles in May, the company said.  In the U.S., its May sales were off 42%, to 190,881 units, with Buick declining 49% to 21,494 vehicles. If the current trend holds, GM China will soon be larger in sales than GM U.S.

Overall, China’s new vehicle sales rose 9.4% to 3.83 million in the first four months of this year, while sales in the U.S. through May have declined 37% to 3.9 million units. When final May numbers are released it is expected that China will continue to be the world’s largest car market.

Chinese Cash for Clunkers in place

SAIC-GM-Wuling has been booking strong sales since January when the Chinese government  cut taxes in half on small vehicles, and has now provided  Yuan 5 billion ($733 million) in rebates to encourage automobile sales in rural regions.

China’s National Development and Reform Commission (NDRC), a key industrial policy setting group, also announced last week that consumers who trade-in their used mid- and small-sized truck and some types of mid-sized passenger cars for new ones will receive rebates from Y3000 Yuan (about $438) to  Y6000. (more…)