And again, it’s time for a TTAC tradition. We ask the patent-pending TTAC market oracle: What were last month’s new car sales in China? TTAC was forced to develop this oracle, because China is always a bit late in reporting official numbers (it’s a big country.) So we devised our patent-pending China prediction system, call it the I-Ching of the automotive business: Take GM China, deduct a few points, and like a miracle, you have the performance of the Chinese market. Works all the time. Usually. Sometimes, it doesn’t.
Our oracle says that the Chinese market will come in at a growth in the low 20 percentile range. Why?
GM China is doing just fine. Sales in June rose 23.2 percent on an annual basis to 176,486 units.
Shanghai GM’s sales in June rose 18.9 percent to 71,782 units. Sales of SAIC-GM-Wuling’s family of mini-vehicles grew 19.7 percent on an annual basis in June to 99,115 units, while FAW-GM sales totaled 5,220 units in the commercial vehicle joint venture’s first June reporting sales. (The solid Wuling showing should bring our oracle back to speed. It were the crummy Wuling numbers last month that caused it to fail.)
For the first half, sales at GM China are up 48.5 percent from the same period in 2009 to 1,209,138 units. That, my friends, is 12 percent more cars sold by GM in China than back home. Hitting the 2m mark by the end of 2010 is entirely possible.
That leading indicator augurs well for the Chinese market, and it disappoints those who predicted that it would auger in. Any growth in June is on top of a near-pornographic 48 percent growth in June 2009.
And what a great deal it is. Joint venture partner SAIC can put all the profits on their balance sheet, GM can show all the sales as theirs.
Update: Uh-oh. Either our oracle needs scheduled maintenance, or it’s the usual Chinese beginning-of-the-month-number-confusion. People’s Daily says: “China’s auto sales slumped by 17.4 percent in June from May, to less than 10 million vehicles.” Well, guys, in June 2009, 1.14m cars were sold in China. “Less than 10 million” in June would be outrageous. If the number is “less than 1 million,” then the year-to-year number would have dropped some 13 percent. In that case, the GM number would be a monster. GM has (with the help of Wuling) outpaced the Chinese market by a point or two, but never by more than 20 percent. We’ll see.