BEIJING: General Motors Co and Ford Motor Co announced their quarterly sales in China fell, albeit at a slower pace sequentially, as the US automakers were hit by a slowing economy amid the Sino-US trade war.
GM’s vehicle sales in China for the quarter ended June 30 dropped 12.2 per cent, while Ford’s sales slumped by 21.7 per cent. While GM also suffered from heightened competition in its key mid-priced SUV segment, Ford was hurt by the limited new models for customers to choose from.
For the first quarter of this year, Ford’s sales in China tumbled 35.8 per cent while GM’s skid 17.5 per cent.
Still, the numbers from GM, the second biggest international automaker in China by sales, and Ford portend more uncertainty for the industry which is trying to rebound from a downward spiral that led to its first annual sales decline last year in more than two decades.
GM delivered 1.57 million vehicles in China in the January-June period this year, while Ford delivered 290,321 vehicles.
China’s factory activity shrank more than expected in June, highlighting the need for more economic stimulus amid higher US tariffs and weaker domestic demand.
Annual car sales in China fell last year for the first time since the 1990s, and they are expected to fall this year too. Sales tumbled 16.4 per cent in May from the same month a year prior, the China Association of Automobile Manufacturers (CAAM) said. That marked the 11th consecutive month of decline and followed falls of 14.6 per cent in April and 5.2 per cent in March.
US car companies’ share of total China passenger vehicles sales fell to 9.6 per cent in the first five months of this year from 10.9 per cent in the year-ago period, according to CAAM. Over the same period, German car makers’ share has risen to 23.3 per cent from 20.9 per cent and Japanese auto makers’ to 21.3 per cent from 17.3 per cent.
CAAM is set to announce June sales next week, which industry analysts forecast will be negative.
In China, GM has a joint venture with SAIC Motor Corp, in which the Buick, Chevrolet and Cadillac are made. It also has another venture, with SAIC and Guangxi Automobile Group, in which they make no-frills minivans and have started to make higher-end cars.
Sales of GM’s affordable brand Baojun dropped 31.8 per cent for the latest quarter. But luxury brand Cadillac’s sales jumped 36.6 per cent.
GM sold 3.64 million units in China last year, down from 4.04 units in 2017.
Ford makes cars in China through its joint venture with Chongqing Changan Automobile Co Ltd and Jiangling Motors Corp Ltd. It has said it would partner with Zotye Automobile Co Ltd to sell lower priced cars.
The Dearborn, Michigan automaker has been struggling to revive sales in China, its second biggest market globally, after its business began slumping in late 2017. Sales sank 37 per cent in 2018, after a 6 per cent decline in 2017. — Reuters
Oman Observer is now on the WhatsApp channel. Click here
