GM China Ignores Akerson, Makes Volume With Wulings

GM's U.S. sales get the headlines, GM's volume is a Chinese import: In the first seven month so the year, GM sold 1.6 million cars in China, versus 1.5 million back home. GM's Chinese sales data deserve more than a cursory look. Let's look. GM China July 2012 July '12 YoY 7 months YoY GM China 199,503 15.1% 1,616,550 11.7% Shanghai GM 97,064 5.7% 736,613 6.5% Buick 52,691 4.8% 395,970 4.9% Chevrolet 44,864 2.8% 347,144 1.6% Cadillac 2,017 -14.7% 16,633 3.3% SAIC-GM-Wuling 98,694 26.6% 844,121 17.4% Wuling 94,178 32.7% 780,898 11.8% Baojun 2,008  - 39,089  - FAW-GM 3,379 3.1% 32,551 -2.9% Black: GM data. Blue: Calculated from historical GM data GM and its Chinese joint ventures sold 199,503 units in July, up 15.1 percent for July 2011, says GM in a press release. This bodes well for the Chinese market as a whole: In the past, GM's Chinese sales have been a good leading indicator. Things are not as rosy as the headline number suggests. Most of the growth comes from the three-way joint venture SAIC-GM-Wuling, where GM now holds a 44 percent share. Wuling is famous for its Sunshine delivery van. Wuling recently made headlines by dropping the price of its best-seller to $4,400. The segment is under pressure, and volume is made with heavy discounting. Shanghai GM's profitable sales of Buicks, Chevrolets and Cadillacs are only up 5.7 percent in July, and 6.5 percent for the first seven months. Last year, Dan Akerson said in an Interview with Fortune: "I'd rather be the most profitable in terms of margins. To produce the most cars — quite frankly, that'd be pretty easy. Overproduce and no margin. That's not the game we're trying to play." Really? Most of GM's volume growth in China, and half of GM's Chinese sales are made with something that did not make much money in the first place, and that now could lose money with every sale. PS: GM's reporting of Chinese data (black numbers in the table) has improved recently. It could be better. Most year-to-date numbers (blue) had to be recalculated. And sometimes, GM can't help it: When a number is less than stellar, such as the Cadillac sales in July (down 15.7 percent by our calculation,) GM just drops the number. Why, GM? Would you rather have the number calculated by TTAC? from The Truth About Cars http://www.thetruthaboutcars.com

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