General Motors Registers Best-Ever September Sales in China
- By Mayank Marwah
The top U.S. automaker General Motors (GM), in collaboration with its joint ventures in China, sold 366,305 vehicles in September, up 6.6% on a year-over-year basis. This was the company's highest ever September sales in terms of volume.
The Detroit automaker's year-to-date sales, on the other hand, surged 1.1% to 2,748,139 vehicles in China. As far as this month is concerned, the sales gain was led by solid performance of GM's brands such as Chevrolet, Buick, Cadillac and Baojun. SUVs remained the highlight of the month as sales of these vehicles soared 63%.
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The intrinsic value of GM
General Motors' China sales took a toll in the initial stages of the year as the Chinese government increased the tax to 10% on vehicles with engines 1.6 liter or lower. The company's bottom line was not hurt as it traded off small cars for high-margin and more profitable SUVs.
Here's a look at the Detroit automaker's monthly sales performance in China.
Performance of GM's brands
Buick sales for the month improved 5.7% to 114,500 units on a year-over-year basis. Several models were responsible for Buick's sales gain. Buick GL8 MPV's deliveries more than doubled due to vigorous demand for GL8 and GL8 Avenir. Total deliveries of Envision reached almost 20,000 units. Sales of LaCrosse premium sedan amounted to more than 9,800 units, up 35% from the same period last year. Sales of the company's top model Excelle GT sedan increased to 44,000 units.
The company's luxury brand Cadillac never fails to perform in China as sales skyrocketed 38% to 17,248 units. September marks the Detroit automaker's 19th consecutive month of double-digit growth. The brand's top-selling model happened to be XT5 luxury SUV whose sales climbed a mammoth 49% to approximately 6,300 units. Cadillac ATS-L sales surpassed 5,300 units. Cadillac CT6 sales totaled roughly 1,200 units, up 65% as compared with September 2016.
Chevrolet deliveries amounted to 57,757 units, up 11.2% on a year-over-year basis. While Malibu sales climbed 52% to almost 14,000 units, Cavalier sales amounted to more than 20,000 units. Sales of SUV Equinox, the company's top-selling model, jumped 32% to nearly 6,200 units sold.
Baojun sales for the month amounted to 94,718 units, up 51%. Baojun's sales rose on account of impressive sales of Baojun 510 SUV and Baojun 310 wagon, whose sales totaled 39,700 units and 13,000 units. Sales of the brand's first battery electric vehicle, Baojun E100, surpassed 1,500 units.
The only brand to report sales decline was Wuling. Sales dropped 24.2% to 82,082 units. Sales of Wuling Hong Guang and Rong Guang amounted to 35,600 units and 38,000 units.
Last word
As of now, General Motors is driving much of its growth from the large vehicles such as SUVs and luxury due to stiff competition from the Chinese domestic automakers. In the small cars segment, the domestic automakers have entered in a price war with the small and inexpensive vehicles offered by General Motors.
September was an astounding month for the company because not only sales of passenger cars and commercial vehicles rose, but SUVs brought in huge volumes as well. Anticipating more growth and expansion, the Detroit automaker will launch 10 new and invigorated models in the second half of the year such as the new Buick Regal, Baojun 310 Wagon and Wuling Hong Guang S3 SUV. Stay tuned for October figures.
Disclosure: I do not hold any position in the stock mentioned in this article.
This article first appeared on GuruFocus.
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The intrinsic value of GM
