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General Motors (GM) China Vehicle Sales Sustain Momentum in Q1

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Zacks Equity Research
·3 min read
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General Motors’ GM vehicle sales in China totaled 780,000 units for first-quarter 2021, surging 69% from the corresponding quarter of 2020, which was badly hit by coronavirus woes. Things started looking up since the second half of 2020 and the recovery has continued since then. The company aimed at strengthening product line-up, with more customer-centric products and focus on customer experiences, to revive sales in China — which is the world’s largest auto market. Aggressive portfolio optimization with high-end sport utility vehicles (SUVs), multi-purpose vehicles (MPVs) and luxury vehicles have yielded positive results.

Highlights of the Brand Performances

The mass-market brand Buick deliveries witnessed 73% growth in the first quarter from the prior-year level to more than 224,000 units. Sales of GL8 MPV, Envision SUV and LaCrosse sedan topped 42,000, 29,000 and 13,000 units, respectively.
 
The luxury brand Cadillac deliveries topped 57,000 units in the quarter under discussion, marking a year-on-year jump of 114%. Its SUV portfolio — comprising XT4, XT5 and XT6 — registered solid performance, with collective sales of more than 34,000 units.

The no-frills brand Wuling sales doubled year over year to more than 347,000 units, as the brand maintained its dominant position in commercial vehicles. Sales of Hong Guang mini-EV exceeded 72,000 units, retaining its position as the best-selling green vehicle in the country.

Chevrolet recorded sale of more than 64,000 vehicles in the first quarter, reflecting a 27% year-over-year rise. Improvement in the brand’s SUV mix, led by Blazer and revamped Equinor, aided the sales growth. Also, sales of Malibu XL flagship sedan surpassed 13,000 units.

Baojun sold more than 86,000 units in the January-March period. In a bid to increase its appeal to the youth generation, the brand is adding the Valli midsize wagon passenger vehicle to its lineup.

GM’s Big EV Push

Amid heightening climate-change concerns, the Chinese government is more inclined toward companies offering green transportation services. General Motors is leaving no stone unturned to demonstrate its EV prowess in the nation. The U.S. auto giant is speeding up the development of advanced technologies in China to enable an all-electric future.

General Motors’ own modular battery platform, Ultium Drive system, will aid the company to undergo a transition to an all-electric portfolio down the road. The company’s next-generation EVs (across all brands) in China will be powered by Ultium Drive. It should be noted that the Cadillac LYRIQ SUV would be the first Ultium-powered vehicle to be rolled out in China at Auto Shanghai 2021 later this month.

The auto giant plans more than 40% of its launches in China in the upcoming five years to be NEVs, in sync with the company’s goal of building a zero-emission future. General Motors — which shares space with Ford F, Tesla TSLA and Volkswagen VWAGY — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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