GM China Ignores Akerson, Makes Volume With Wulings

Bertel Schmitt
by Bertel Schmitt

GM’s U.S. sales get the headlines, GM’s volume is a Chinese import: In the first seven months of the year, GM sold 1.6 million cars in China, versus 1.5 million back home. GM’s Chinese sales data deserve more than a cursory look. Let’s look.

GM China July 2012July ’12YoY7 monthsYoYGM China199,50315.1%1,616,55011.7%Shanghai GM97,0645.7%736,6136.5%Buick52,6914.8%395,9704.9%Chevrolet44,8642.8%347,1441.6%Cadillac2,017-14.7%16,6333.3%SAIC-GM-Wuling98,69426.6%844,12117.4%Wuling94,17832.7%780,89811.8%Baojun2,008 –39,089 –FAW-GM3,3793.1%32,551-2.9%Black: GM data. Blue: Calculated from historical GM data

GM and its Chinese joint ventures sold 199,503 units in July, up 15.1 percent for July 2011, says GM in a press release. This bodes well for the Chinese market as a whole: In the past, GM’s Chinese sales have been a good leading indicator.

Things are not as rosy as the headline number suggests. Most of the growth comes from the three-way joint venture SAIC-GM-Wuling, where GM now holds a 44 percent share. Wuling is famous for its Sunshine delivery van. Wuling recently made headlines by dropping the price of its best-seller to $4,400. The segment is under pressure, and volume is made with heavy discounting.

Shanghai GM’s profitable sales of Buicks, Chevrolets and Cadillacs are up only 5.7 percent in July, and 6.5 percent for the first seven months.

Last year, Dan Akerson said in an Interview with Fortune:

“I’d rather be the most profitable in terms of margins. To produce the most cars — quite frankly, that’d be pretty easy. Overproduce and no margin. That’s not the game we’re trying to play.”

Really? Most of GM’s volume growth in China, and half of GM’s Chinese sales are made with something that did not make much money in the first place, and that now could lose money with every sale.

PS: GM’s reporting of Chinese data (black numbers in the table) has improved recently. It could be better. Most year-to-date numbers (blue) had to be recalculated. And sometimes, GM can’t help it: When a number is less than stellar, such as the Cadillac sales in July (down 15.7 percent by our calculation,) GM just drops the number. Why, GM? Would you rather have the number calculated by TTAC?

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=""> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href=""> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Binkje Binkje on Aug 06, 2012

    Where did the GM Spyker lawsuit topic go?

  • Doctor olds Doctor olds on Aug 07, 2012

    1- What data do you have to support the notion that Wuling sales are loss making? (I know you have no idea really!) 2- Akerson's comment related to the richest market region in the world, North America. In the pre-bankruptcy days, GM (along with Ford & Chrysler to a lesser degree) had to pay the UAW folks, whether there was work for them, or not. That reality drove the "discount to create volume" behavior of the past. GM is clearly not doing that in America now, and is generating great profits here.

  • JK I grew up with Dodge trucks in the US, and now live in Turin, Italy, the home of Fiat. I don't think Italians view this as an Italian company either. There are constant news articles and protests about how stalantis is moving operations out of Italy. Jeep is strangely popular here though. I think last time I looked at stelantis's numbers, Jeep was the only thing saving them from big big problems.
  • Bd2 Oh yeah, funny how Trumpers (much less the Orange Con, himself) are perfectly willing to throw away the Constitution...
  • Bd2 Geeze, Anal sure likes to spread his drivelA huge problem was Fisher and his wife - who overspent when they were flush with cash and repeatedly did things ad hoc and didn't listen to their employees (who had more experience when it came to auto manufacturing, engineering, etc).
  • Tassos My Colleague Mike B bought one of these (the 300 SEL, same champagne color) new around June 1990. I thought he paid $50k originally but recently he told me it was $62k. At that time my Accord 1990 Coupe LX cost new, all included, $15k. So today the same car means $150k for the S class and $35k-40k for the Accord. So those %0 or 62k , these were NOT worthless, Idiot Joe Biden devalued dollars, so he paid AN ARM AND A LEG. And he babied the car, he really loved it, despite its very weak I6 engine with a mere 177 HP and 188 LBFT, and kept it forever. By the time he asked me to drive it (to take him to the dealer because his worthless POS Buick Rainier "SUV" needed expensive repairs (yes, it was a cheap Buick but he had to shell out thousands), the car needed a lot of suspension work, it drove like an awful clunker. He ended up donating it after 30 years or so. THIS POS is no different, and much older. Its CHEAPSKATE owner should ALSO donate it to charity instead of trying to make a few measly bucks off its CARCASS. Pathetic!
  • RHD The re-paint looks like it was done with a four-inch paintbrush. As far as VWs go, it's a rebadged Seat... which is still kind of a VW, made in Mexico from a Complete Knock-Down kit. 28 years in Mexico being driven like a flogged mule while wearing that ridiculous rear spoiler is a tough life, but it has actually survived... It's unique (to us), weird, funky (very funky), and certainly not worth over five grand plus the headaches of trying to get it across the border and registered at the local DMV.