General Motors’ business partner in China, SAIC GM, may show a drop in sales for the second straight year.
According to a new report published by The Detroit News, SAIC GM is projecting its overall company sales will fall about 7% year-over-year in 2019, while the GM side of its business will show a dip in sales of 8%. This would be the second straight year that SAIC GM reported a drop in sales.
SAIC also has a partnership with Germany’s VW Group to build vehicles for local consumption in China. The VW side of the business will show a 3% dip in sales, the report indicates.
While SAIC GM posted negative year-over-year sales in 2018, this will be the first time in 14 years the Chinese automaker as a whole has reported a dip in sales.
The automaker had previously predicted it would post a slight increase in sales for 2019. It’s new projection of 6.54 million units is 8% below its original estimate, the report says. SAIC GM is expected to post sales of 1.84 million units, while the VW arm of the operation is predicting overall sales of 2 million units.
The Detroit News says the results are a clear sign that the global car market is trending downward – not just in China and Asia but in the US and Europe as well. Neither VW nor GM would provide a comment on the results when the publication asked.
Trade tensions also pose a threat to China’s automotive industry and for partnerships like the one SAIC has with GM. Last fall, GM CEO Mary Barra said she was watching the situation “carefully” and said the company was “very hopeful that both sides will have dialogue and get to the table to work through some very important issues that both China and the United States have as it relates to trade.”
Source: The Detroit News