Sales at GM's venture with Shanghai Automotive Industry Corp. dropped 8.3 percent to 458,642 units last year compared with 2007, the carmaker said in a statement this week. Sales growth across the industry was estimated at 5-8 percent over the same period, despite a cooling of the market in the second quarter of 2008.
Analyst Zhu Xuedong of Industrial Securities Co. commented to Chinese media that Shanghai GM's sales performance was below the industry average in 2008 because "the pricing and design of new models failed to appeal to consumers." He also noted that the company's products were not sufficiently competitive in fuel efficiency, which he called "more and more important to Chinese consumers."
It is Buick's lackluster sales performance that has dragged down the company in China. Shanghai GM recently introduced the remodeled Buick Excelle and Regal sedans as well as the Chevrolet Aveo and the imported Cadillac CTS. The Excelle was the biggest disappointment as a large number of consumers opted to purchase the Volkswagen Jetta or the Toyota Corolla instead.
Meanwhile, Chevrolet-branded vehicles enjoyed a 15.6 percent growth surge to 170,000 units, and Cadillac and Saab sales also grew well. Shanghai GM is pinning hopes on the Chevrolet Cruze to rev up sales when it goes on sale here in the second quarter.
Undaunted by the current problems, General Motors targets increasing sales by about 9 percent on the Chinese mainland, to 1.2 million units, counting on the government's stimulus plan and the introduction of new models to help revive overall demand.
Inside Line says: A period of adjustment is in order for Shanghai GM to better understand what China's consumers really want. — Vivian Jin, Correspondent
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