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General Motors Records 3rd-Quarter Sales Growth in China

GuruFocus.com
·3 mins read

- By Mayank Marwah

U.S. automaker General Motors Co. (NYSE:GM) released its third-quarter China sales report on Oct. 12.

The Detroit-based automaker delivered more than 771,400 vehicles in China between July and September, up 12% on a year-over-year basis. This reflects a recovery from a 5% sales decline reported in the second quarter due to the outbreak of the coronavirus.


How did the brands fare?

All of the company's major brands registered sales growth in China, with the exception of Chevrolet and Baojun. This quarter marked the first time the company recorded growth after eight consecutive quarters of sales decline.

Buick sales amounted to more than 250,000 units, up 26% from the third quarter of last year. The company attributed the growth to strong sales of GL8 Avenir luxury MPV family, up 17% to roughly 52,000 units. Additionally, Envision family sales came in at more than 34,000 units. In an effort to strengthen its SUV presence in China, the brand launched Envision S and Envision S Avenir in July.

Chevrolet sales came in at more than 70,000 units, which reflected a decline of 20%. The brand rolled out the refreshed Equinox SUV during the quarter in an effort to expand its product portfolio.

Baojun sales dipped 19% to over 100,000 units in the third quarter.

Wuling deliveries came in at 270,000 units, up 26%. Sales of Hong Guang MINI EV, the brand's first electric model, were 28,000 units. Wuling was the best brand in China as compared to other brands in terms of volume sold.

Cadillac sales totalled 65,000 units in China, which was 28% higher than the previous year's quarter. The combined sales of XTS, XT5 and XT6 surpassed 40,000 units.

Road ahead

General Motors has introduced more than 10 new energy vehicles in the world's hottest car market. The company's NEV sales in China were more than two times the volume in the first nine months of the year as compared as compared to the prior year. Given the scintillating run NEVs have had in China, the company said more than 40% of the new launches in China in the next five years will be NEVs.

Chinese auto sales

According to the China Association of Automobile Manufacturers, auto sales are slated grow 13.3% in September to 2.57 million vehicles, bringing the year-to-date sales to 17.12 million units. Geely, a privately held multinational carmaker, reported sales of 126,365 units in September, translating to sales growth of 11% year over year. In addition, China's largest pickup and SUV maker, Great Wall Motors, witnessed September sales growth of 20% from a year earlier. Shifting gears, international automakers like Toyota Motor Corp. (NYSE:TM) and Honda Motor Co. (NYSE:HMC) saw sales increase in the reported quarter.

Disclosure: I do not hold any positions in the stocks mentioned.

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This article first appeared on GuruFocus.