Posted by: Frederik Balfour on August 3, 2009
Vrooom! GM auto sales in China soared 78% in July compared with last year, propelling Chinese car sales for General Motors’ mainland joint ventures in the first seven months by nearly 43%, as sales of locally made Buicks and especially 0f low cost minivans under the local Wuling brand. Total sales reached 959,035 vehicles. As my colleague Ian Rowley who covers the auto industry in Asia points out: “A lot of the sales growth is from the low-margin Wuling minivan JV, in which GM only owns a 1/3 stake. Some analysts argue that it shouldn’t even count those sales, which account for 65% of the total, as its own given Shanghai Auto has a 51% share.
The latest results, trumpeted by GM in a press release waiting in my in-box when I got to work on Monday morning, provides fresh evidence supporting projections of China becoming a 12 million vehicle market this year and widening its lead over the U.S. as the world’s biggest auto market. It also shows the breadth of China’s economic recovery, particularly in second and third-tier cities where the demand for cars [and consumption demand overall] is growing much faster than coastal metropolises like Shanghai and Beijing.
China’s latest PMI figures also show the economy’s upward momentum is building edged up to 53.3 in July from 53.2 in June, its fifth consecutive month above 50, indicating a steady expansion in new orders.