The largest US automaker and the third biggest in the world has announced its Chinese sales – the group’s second biggest market – slid four percent last month compared to the same period last year.
Still, the automaker said its profit margins remained upbeat this year in China because it took careful measures to protect the profit threshold even as the overall market has been sliding recently because of dwindling consumer confidence. The Chinese market has been impacted by the slowest economical growth in the past 25 years and the recent stock market troubles. GM and its local joint ventures have delivered 229,175 vehicles on the Chinese market – the world’s largest – last month, with a statement issued by the automaker also putting the blame on model changeovers. The July figures compare to the meager 0.2 percent increase in June and another 4 percent slide in May, with overall sales for the first six months of the year soaring 3.3 percent compared to the same time frame last year.
Industry data shows the Chinese market is posting negative results now, but the US company said it still forecasts the achievement of strong earnings margins, in the range of nine to ten percent – a level established back in May by GM China chief Matt Tsien. Analysts believe the company’s recent change of strategy to deliver more SUVs, including affordable models such as the low-cost Baojun 560 might have a negative take on the Chinese margins, but in the end the luxury Cadillac’s increasing sales could offset the profit income.