By on November 6, 2010

Did we say „duh“ when GM China announced plans to make more than 2m cars in China this year, the first foreign joint venturer to do so? When they said that, they already had 1,976,913 units in the can, and nobody did doubt that GM would find the 23,087 buyers to reach the 2m. Well, a few days later, they found them.

Last Thursday, GM became the first international automaker to sell 2 million vehicles in a year in China, Global Times reports.

What did Kevin Wale GM China’s president and managing director, have to say to this? “This is another important milestone for General Motors in China.” What else should he say?

Well, let’s add our 2 yuan.

  • The numbers illustrate GM’s dependence on the Chinese market. Not only is China the world’s largest car market (and it barely has started). It is also GM’s largest, dwarfing sales at home. It is no coincidence that GM International is being ruled from Shanghai.
  • The numbers also are as genuine as a Gucci bag in Beijing’s silk market. Around a million of the two million cars GM allegedly sold in China are Wulings, small and cheap vans, made by a three-way joint venture between Wuling, SAIC and GM. GM has a 37 percent share in the business, but is contractually entitled to count 100 percent of the cars as theirs.

I can hear the Chinese snicker: “Those crazy Americans. But let them, if they insist. Who cares as long as we make and sell the cars?” GM can crow as much as they want that they are China’s largest, it’s a bogus claim. With the Wuling vans removed, the real world looks a bit different.

According to official J.D.Power data, published by Automotive News [sub], China’s largest passenger vehicle brand is Volkswagen, which had sold 1,096,571 cars in the first nine months. A distant number 2 is (surprise!) Toyota with 579,966 cars. Followed by Hyundai (536,813, watch out, Toyota), Nissan (512,371), and Honda (475,695). Buick lands on #7 with 401,408 cars. Chevrolet (382,622 units) comes after BYD (386,214). Ironic: Chevy is in the same league as Chery (369,622 units.)

Even if we don’t play the brand game, VW comes out on top. Volkswagen, Audi and Skoda together sold 1,409,153 units in the first nine months, Buick and Chevy 784,030. (J.D. Power doesn’t deliver Cadillac numbers. Never mind, we won’t count Bentley, Bugatti and Lamborghini either.)

Somehow, I don’t think these data will feature big in the IPO prospectus.

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13 Comments on “GM Breaks 2 Million Car Sound Barrier In China. TTAC Dissects The Numbers...”


  • avatar
    Cammy Corrigan

    What the hell happened to Nissan? Why did they drop so much from last year?
     
    http://www.thetruthaboutcars.com/2010/01/chinese-buy-13-6m-cars-up-45-percent/

  • avatar

    I haven’t looked at it in a few weeks, but IIRC all of this — at least, the ownership percentage in the Wuling venture, the fact that it’s about half of their China sales, and the fact that they have the contractual right to count all of those sales as “GM” — IS in the IPO prospectus. It’s certainly not some big secret. You are usually very well-informed, Bertel, so I’m surprised that you haven’t checked out this informative and useful document. You (and everyone else presuming to have an informed opinion about GM’s business and prospects) should definitely read the first 35 or so pages of the prospectus carefully, then skim to about page 190. It’ll take you an hour or two, and it won’t hurt.

    • 0 avatar

      It doesn’t surprise me that it’s at page 190. I haven’t read the prospectus, and I won’t. But I know how to write them. People don’t even read past the part that says that they can lose all their investment.
      The fact remains: If GM made 2 million cars in China, then the shirt I wear is a real BOSS, for which I paid $6.

    • 0 avatar

      It’s surprising to see someone who is holding himself out as an informed pundit willfully refuse to read what will probably be the most objective, thorough, and straightforward document GM will ever publish on its business. I expected better from TTAC.

    • 0 avatar
      chuckR

      I don’t understand the indignation. In their contract, GM reserved the right to pull the wool over the eyes of investors – who should read the damn prospectus – and the general public, who won’t. How does this make them look good? Actually, the fact that they sell 800K cars that really are theirs is impressive.

  • avatar
    DearS

    I wonder what the average vehicle trasaction prices are in China and the average income of the lower 90% of buyers is.

    googled it. its around 17k vs. 27k for transaction prices. so its still around a 50% difference.

  • avatar
    Trend-Shifter

    For now I would give GM it’s due credit, contractual or otherwise.    Without GM, Wuling would be losing most of it’s van market share to Chang’an.   

    I have been to the Wuling manufacturing complex in Liuzhou several years ago when they were implementing pieces of the GM manufacturing system.  (to be modified and called the Wuling system)
    There were vehicles everwhere being transported around the facility on flatbed trucks and dollies being reworked & modified.  Fit, finish, paint, and design had no perceived or real level of quality. 

    Today the Wuling vehicles have a higher level of quality & design, both perceived and real. 
    Todays China consumer would not have tolerated the old Wuling, especially small business owners. 

  • avatar
    rpol35

    Blah, blah, blah, same old tired Farago style rant about GM. Everything they do is wrong, contrived, etc. It’s a shame that this “objective” style reporting continues.

  • avatar

    So it looks like not counting the Wuling vans, GM is the #2 seller of cars in a fast growing and large market, ahead of Toyota, Hyundai, Honda et al. Everybody but VW.

    This is more of a guess than anything but I get the impression that VW’s strength in China has less to do with grand strategic plans than dumb luck.

    If grand strategic plans worked out, American Motors would be the biggest brand in China.

    It started with a grand vision and ended up being such a debacle that case studies and books have been written about it:
    Beijing Jeep: The Short, Unhappy Romance of American Business in China
    by Jim Mann

  • avatar


    So it looks like not counting the Wuling vans, GM is the #2 seller of cars in a fast growing and large market, ahead of Toyota, Hyundai, Honda et al. Everybody but VW.
    This is more of a guess than anything but I get the impression that VW’s strength in China has less to do with grand strategic plans than dumb luck.
    If grand strategic plans worked out, American Motors would be the biggest brand in China.
    It started with a grand vision and ended up being such a debacle that case studies and books have been written about it:
    Beijing Jeep: The Short, Unhappy Romance of American Business in China by Jim Mann
     

  • avatar
    i_godzuki

    I believe the GM-SAIC-Wuling Sunshine has sold the most in China this year at about 600,000 units so far. It costs about $4-$5k

  • avatar
    Steven02

    You say that GM is dependent on sales in China, but then say that VW has more sales in China than GM does.  So, does this mean that you could essentially write the same article about VW being so dependent on the Chinese market because it is far outselling what is going on in Germany and the rest of Europe?
    Every auto manufacture with real skin in the game is dependent upon China, just like they were on the US when it had 17m units a year.  What is your point?


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