By on October 24, 2009

Government Motors. (Picture courtesy blog.cleveland.com)

Here’s a piece of news that will make Gordon G. Chang double his daily dose of Maalox, after he had eaten his words written in Forbes: This September, GM China sold more cars than GM USA. General Motors and its local joint ventures sold a record 181,148 vehicles in China in September, the company reports via Gasgoo. Back home in the U.S.A. GM sold 156,673 cars and trucks, as per Automotive News [sub] official statistics.

China is well on its way to become the No. 1 market for GM. In the first nine months, GM sold more than 1.29 million vehicles in China, up 55.6 percent from a year earlier. GM’s US sales dropped 36.3 percent to 1.53 million cars and trucks in the same Jan-Sept period. With sales of cast-off brands Hummer, Pontiac, Saab and Saturn eliminated, GM’s U.S. sales were 1.3 million in September, just slightly more than the automaker’s China sales.

While GM’s sales in the US are heading South, GM’s sales in China may grow more than 40 percent to exceed 1.6 million vehicles for the full year of 2009, said Kevin Wale, president for GM China. He said first-time car buyers in China’s smaller cities were a major driving force behind surging sales. He said nothing about state enterprises having been commanded to hoard cars on secret parking lots, as reported by Forbes.

For next year, Wale has even more ambitious goals. He sees GM China to outperform China’s booming auto market in 2010. GM plans to roll out 30 new or revamped models in China from 2009 to 2014, including 10 Buick and Chevrolet models due for launch this year and next. “China is a key part of GM’s future strategy. It is currently the largest and fastest growing market in the world,” said Wale to the WSJ,. “We will continue to put priority on our success here in China.” Fritz Henderson recently came to China to enjoy some freedom: In China, GM is only 50 percent owned by the government.

Now, Gordon, who are you going to disbelieve? The Chinese government, or a company owned by the US government? Any guesses what his answer will be?

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20 Comments on “GM Sells More Cars In China Than Back Home...”


  • avatar
    PeteMoran

    Now, Gordon, who are you going to disbelieve? The Chinese government, or a company owned by the US government? Any guesses what his answer will be?

    Who cares – the real numbers aren’t being provided (EDIT: sorry – I mean in general – not specifically Bertel).

    What is the average transaction price (or the total sales turnover) and are they making money at that level?

    I’m gonna’ take a guess at 181,148 Chinese GM’s providing less than 1/3 the turnover ($US) of 156,673 GM USofA vehicles.

  • avatar

    You keep asking for those transaction numbers whenever the sales stats come out. You will not get any answers, and you know it. Everybody counts units. Nobody keeps track of transaction prices, at least not on a worldwide scale. If you find them, post them. I don’t have them.

    Automotive News, the keeper of all automotive data worth keeping has everything from “Estimated Europe registrations by country, 9 mos.” to “Customer and Dealer Incentives” to “Canada light-vehicle sales by nameplate, Sept. & YTD” but nothing on average transaction prices by country. Asking for data that is known as unavailable is an old hat ploy to derail a discussion. Only fools will fall for it.

    As for “Are they making any money at that level?” that is a question that better goes unasked when comparing GM US with GM China. GM China hasn’t gone bankrupt yet.

  • avatar
    PeteMoran

    Nobody keeps track of transaction prices, at least not on a worldwide scale. If you find them, post them. I don’t have them.

    Toyota produce an income statement in their reports that has “Sales Of Products”. They (usually) split it into Japan, USA, Europe, Asia and “Other”.

    For example;

    May-Jun 09 Net Revenue/Operating Income

    USA 1,175b YEN from 387,078 units
    Japan 2,181b YEN from 407,043 units
    Asia 494b YEN from 194,579 units

    For the purposes of the exercise, only a small fraction is income from financing (~40b YEN).

    Asking for data that is known as unavailable is an old hat ploy to derail a discussion.

    Well, I’d suggest Units are near meaningless. GM China could be selling 181,148 $1,000 cars.

    Does GM China produce an Income Statement?

  • avatar
    mikedt

    Why is GM China doing so well? Are GM China cars better than what we get here or is it simply that GM China isn’t fighting a 20 year reputation of making crappy cars?

  • avatar

    Well, I’d suggest Units are near meaningless.

    I’m sorry, nobody in this industry shares your conviction. I have been in this industry for (dare I say it) 36 years, and the universally agreed-upon metric is number of vehicles. Also known as “units” in the trade. Which should be a giveaway.

    The size of a dealer is measured in units. The size of a car company is measured in units. Car density is measured in units/1000. Market share is measured in unit percentage of market. The yearly OICA ranking of the word’s largest manufactures is ranked by units. ACEA: Units. CAAM: Units. SAAR: Units.

    Can’t help it. That’s the way it is.

  • avatar
    KingShango

    While I understand that “units” is the standard metric, I also have to agree with PeteMoran that it shouldn’t be. GM had been the worlds largest auto manufacturer for years measured by units and they still went bankrupt. Why? Because they weren’t making any money off all those units they sold. While I’m sure that GM China is earning a profit, I’m also pretty sure that they have to split those earnings with SAIC. For years I worked for a “big box” retailer that whose mantra was “growth at all costs.” And they were successful and opened new stores every month until somebody realized that having a store on every corner meant nothing if they were constantly in the red.
    Only focusing on one aspect of a company doesn’t show the true picture.

  • avatar
    PeteMoran

    @ BS

    I have nothing like 36 years experience, and certainly not in automotives (good thing?).

    When I’ve worked with manufacturing companies (all kinds) they talk about income per unit, or margin per unit, or gross profit per unit, or (at worst) cost per unit. Sometimes they talk about market share, sometimes they talk about total revenues….

    You get the idea ….

    Why is automotive manufacturing unique in business? Without an income statement, “unit” claims are just spam spam spam spam eggs bacon and spam.

  • avatar
    rocketrodeo

    Reporting success, or lack of it, in units vs. net profits goes a long way in explaining why GM is so hung up on market share, and also perhaps why things got so out of hand before they admitted they had a problem. I tend to agree with Pete–it’s not a terribly useful metric to anyone not in sales, production, or forecasting. Why should it be either/or? Look at the numbers he posted–Toyota nets nearly twice as much on only five percent more volume in Japan vs. the US. I would think that’s significant as hell.

  • avatar
    BDB

    China will be a bigger market than the USA and Europe for cars in the future. We get it already. They have more people.

  • avatar

    Most of the cars GM sells in China are technically Daewoos. They are not cars that sell well in the U.S. market, but the Chinese have different needs and tastes in cars.

    And, yes, it helps a lot that GM lacks the baggage in China that it has in the U.S.

    In China, the indigenous Chinese companies are the ones with the baggage.

  • avatar
    John Horner

    Calm down folks. Automobile companies do indeed report full P&L statements on a quarterly basis. I can’t think of any industry where the companies publicly report P&L on a monthly basis. Many say nothing at all on a monthly basis, while some like retailers report gross sales and auto companies report unit sales. If you want to find funny money reporting, look into the entertainment business some day.

    Unit sales are indeed one of the important metrics for an automotive company. Show me an automotive company which is growing unit sales and you almost invariably also see a company which is profitable and healthy. Conversely, look at any automotive company with shrinking unit sales and you invariable find deep trouble on the P&L.

    There is an old proverb variously attributed to the French, the Italians and the Mongols: “One idiot can ask more questions than ten wise men can answer.”

  • avatar
    ohsnapback

    This is very misleading.

    The average car sold in China is less than $6,000 U.S., and many cars, such as those produced by GM’s subsidiary, Wuling, sell for as little as $3,700.

    Also, this year’s sales in China were prompted by a record 550 billion in stimulus, and subsidized petrol and diesel prices, also.

    Listen to the Chinese Premier, who honestly and forthrightly states that Chinese growth is fragile, uneven, uncoordinated and unstable.

  • avatar
    golden2husky

    Why is GM China doing so well? Are GM China cars better than what we get here or is it simply that GM China isn’t fighting a 20 year reputation of making crappy cars?…

    I would say that not having the baggage of 20 plus years of producing marginal products and the reputation for telling millions of customers over the years “tough sh-t, we are not standing behind our engineering/cost cutting mistakes” would be a great asset.

    I do also believe that if Americans suddenly had the availability to buy this new, virtually unheard of imported brand called “GM” that they would rate the products a lot higher than they do now. Like it or not, very few people can put personal bias aside. Why do you think you have such brand loyalty in such markets like pickup trucks? The Ford guy will have a list of reasons why the Chevy product sucks. Having just paid $600 to repair rotted brake lines on a Buick*** I know the feeling of being robbed for replacing what should be a lifetime part on a car. GM’s response was “your car is well out of warranty”. Nice. I wonder what my attorney would have said if the failure caused a serious accident?

    ***NOTICE: Anyone out there who drives an 5 to 12 year old GM “W” body (maybe others) please have your steel brake lines checked. Ours rotted out in two places; one between the rear subframe and the other in the front. The pedal went right to the floor and all braking was lost. Lucky for us, the failure took place in the driveway, not during a panic stop. We kept the brake lines for evidence and filed a report with the NHSTA. Searching online reveals this to be a common problem for this model. We do not live in a high salt area either. Hope this saves a life…

  • avatar
    criminalenterprise

    @ golden2husky:

    My driveway has a 20% grade. It would not be so lucky a place as yours!

  • avatar

    Is that right that though Sept ‘09 Gm outsold Toyota by more than 3000,000 units in US?

    Off by a digit

    GM sales US through Sept 1,536,903
    Toyota GM sales US through Sept 1,296,422

  • avatar
    George B

    Bertel, is it easier or more difficult to achieve a unit of car sale in China relative to the US? I would guess that China has many people who want a car who don’t already own one, but fewer people who can afford a car. In the US the market is pretty much saturated, but income levels are relatively high.

  • avatar
    seabrjim

    golden2husky, my 97 LeSabre had all of them rot out 1 after another along with the proportioning block. Every line on the car out to the wheel cylinders had to be replaced.Cheap metal for a dash bracket is one thing, brake components quite another. Typical GM.

  • avatar
    asdfghjkl

    We as Americans can not see beyond our nose that GM now makes great cars. We are so in love with Japanese products that few consumers will check out American cars before buying a new car. Wake up America!!!

  • avatar
    manny

    I had a 1980 Z-28, bought it new from the lot, at 23,000 miles the harmonic damper cut through the cover, luckily I caught it on time. Driving to college the left exhaust manifold cracked, I sold the car after repairs and bought a brand-spanking new 1981 Corvette, quite beautiful…..At 9000 miles the car would travel 3 or 4 blocks and shut off completely, it turned out to be the control-command computer, a new item for 1981, this went till the end of 1981, the dealer having replaced the darn thing 3 times, I went to my local Datsun dealer and bought a brand new 280ZX, kept it till 265,000 miles, no problems. Fast forward, I’m on my fourth Nissan product (Infiniti I-35)looking forward to January of next year when the new revised Infiniti G-37 coupe makes it’s debut. RIP GM, you will not be missed.

  • avatar
    asdfghjkl

    In 1974 I bought a brand new Datsun B210 to find out what the hype was all about with the Japanese cars. Consumers Report rated this car as a great car. Within the two years I owned it, the engine had to be taken apart for a warp head, the brakes gave me trouble with a leaky cylinder, the transmission had to be overhauled. Needless to say, I never believe Cosumers Report and did not buy another Japanese vehicle until 2003 when I bought a Toyota Matrix. The Matrix was also a poor choice. Wheels bearings had to be replaced, engine was always hard in starting. Replaced the alternator and traded the car with 25,000 miles on it with a fear something else would break.
    I’ve own GM cars in between those years with no such major problems as I had with the Japanese cars.


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