GM's China Sales Down 1.8 Percent In July. Ignore It.

GM China and its joint ventures sold 173,398 vehicles in China during the month of July, “as Shanghai GM and GM’s Buick, Chevrolet and Cadillac brands all set sales records for the month,” GM’s press release says. Nonetheless, GM’s China sales in July were down 1.8 percent from the same month last year. Now how did that happen? Why should you care? Why should anybody care?

We at TTAC care about GM China for many reasons, one of them being that GM serves as TTAC’s Patent Pending Sales Oracle for China. As goes GM, as goes China. This used to be the case in the past. Lately, the oracle became a bit wobbly. Why? Because more than half of GM China’s sales used to be little delivery vans made by the SAIC-GM-Wuling joint venture. This segment has collapsed for various reasons.

There was a preferential tax treatment last year for cars below 1.6 liter. What’s more, there was a “cars to the countryside” subsidy program. These little delivery vans are as popular in the Chinese countryside as pickups are in Texas. However, the popularity fades with the subsidy money gone. And that drags GM’s overall unit sales numbers down.

GM China, July 2011

Blue: TTAC calculation. Black: GM numbers.

Meanwhile, GM China’s passenger vehicle market is alive and well. Buick up 15.4 percent.

Chevrolet allegedly up 17.4 percent. When running the numbers, we get an even better number. 35,385 Chevys sold in July 2010 and 46,154 sold in July 2011 translate into an increase of 30.4 percent on my version of Excel. GM’s chief number honcho in Detroit is as stumped as I am. He kicked it back to Dayna Hart in Shanghai, where it is 10:30 pm on a Friday night ….

When Chinese new car sales will be announced next week on Wednesday, you probably will see a meek number. Don’t believe it. The Chinese car market is composed from two thirds of passenger vehicles, and one third of commercial vehicles. Passenger vehicle sales grow. Commercial vehicle sales are down.

Supporting indicator: Audi’s July sales in China were up 35.2 percent at 27,767 vehicles, accounting for more than a quarter of group sales, Reuters says.