General Motors Co. (NYSE:GM) announced on Thursday sales in China dropped in the third quarter as compared to the prior-year quarter owing to a number of factors, such as a slowing economy, the ongoing U.S.-China trade war and stiff competition in the mid-sized SUV segment.
About the quarter
General Motors posted a sales decline of 17.5% to 689,531 units as only the Cadillac brand managed to report a sales gain year over year. This marked the fifth successive quarter of sales decline for the company in the world's hottest car market.
How did the brands fare?
Buick sales plunged 20.6% to 199,688 units. The brand's best-selling vehicle, the Excelle GT sedan, witnessed an impressive sales growth of 20%. Sales grew 24% to roughly 45,000 units for the Buick GL8 MPV family. However, poor SUV sales dented the brand's overall performance.
Chevrolet experienced sales decline of 18.1% to 96,808 units. Chevrolet Monza, a new sports sedan, happened to be the brand's best-seller for the quarter with approximately 43,000 units sold. Additionally, Malibu XL sales climbed 32% to 17,000 units. However, sales of crossover SUVs remained low due to tough competition as well as model changeover, which hurt Chevrolet's results. Due to the growing popularity of SUVs, the company will launch the three-row Chevrolet Blazer XL this year.
Cadillac sales grew 10.9% to 51,049 units and was the only brand to report a sales gain. The company attributed the gain to huge sales volumes of the XT4 compact luxury SUV (14,000 units) and XT5 mid-size luxury SUV (13,000 units). The CT6 sedan also contributed to the brand's sales growth with sales up a mammoth 68% to nearly 6,500 units.
Baojun sales dropped 34.9% to 122,900 units in the third quarter. While sales of its new small electric E100 and E200 commuter cars were impressive, the 560 SUV sales lagged behind due to intensified domestic competition.
Wuling sales dipped 5.3% to 219,086 units.
Company's third-quarter earnings are expected to be adversely affected as General Motors, along with its Chinese joint ventures, have increased spending toward new product launches.
In order to turn its sagging sales around, the company will roll out about 20 new and refreshed models in China this year.
Disclosure: I do not hold any positions in the stocks mentioned.
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This article first appeared on GuruFocus.