GM Breaks 2 Million Car Sound Barrier In China. TTAC Dissects The Numbers

Bertel Schmitt
by Bertel Schmitt

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.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

More by Bertel Schmitt

Comments
Join the conversation
3 of 13 comments
  • I_godzuki I_godzuki on Nov 08, 2010

    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

  • Steven02 Steven02 on Nov 08, 2010

    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?

    • Geozinger Geozinger on Nov 08, 2010

      Maybe the point is to somehow associate any Chinese interests in GM (and vice versa) as somehow bad?

Next