Earlier this week, we reported on GM China sales figures for the 2019 calendar year, which saw a 15-percent decrease to 3,093,604 units. Sales fell at Buick, Chevrolet, Wuling, and Baojun, but increased at Cadillac. Unfortunately, the forecast for 2020 calls for further weakening in Chinese consumer demand across the industry.
“During the downturn, we are focused on bolstering our product lineup and improving cost efficiency to position our company for strong performance in China over the long term,” said GM executive vice president and president of GM China, Matt Tsien. “We expect the market downturn to continue in 2020, and anticipate ongoing headwinds in our China business.”
Tsien’s gloomy outlook is echoed by a recent report from Bloomberg, which cites a prediction from the China Association of Automobile Manufacturers in outlining a 2 percent decline in Chinese auto sales for 2020, down to a predicted 25.3 million units total. The expected sales drop for 2020 will follow an 8 percent sales drop in 2019 and a 3 percent sales drop in 2018. Prior to these recent sales declines, the Chinese auto market saw decades of growth.
Although GM China does see significant sales numbers in the region, most of General Motors’ profits are derived from sales in North America, and the U.S. in particular. This is due to the fact that GM must split earnings from its Chinese sales with its forced “joint venture” partners, SAIC and Wuling.
Nevertheless, GM China continues to transform its product portfolio going forward with the introduction of new luxury vehicles, large SUVs, and the ongoing rollout and development of new energy vehicles (NEVs). Luxury vehicles and midsize/large SUVs and MPVs will be the primary focus for the 2020 calendar year, given the segments’ strength in China and around the world.
Last year, GM China introduced over 20 new and refreshed models.