General Motors, the largest US automaker and the third biggest in the world has recently joined its major rival Volkswagen AG in lowering the prices of models sold in China, as foreign brands have been reporting declining sales.
April’s overall tally across the Chinese market, the largest single auto market in the world was also negative, with consumer demand impacted by the slower economic growth seen in China this year. Both General Motors and Volkswagen AG, the second largest automaker in the world and Europe’s biggest, count China as their largest market and have decided to increase incentives as the delivery growth slows. GM and its joint venture with SAIC Motor said price cuts would go as far as 53,900 yuan ($8,700) for around 40 models at the Buick, Chevrolet and Cadillac brands, according to their official websites. The company reported in April that Buick sales dropped 8.5 percent and Chevrolet’s sales slumped 5.6 percent.
Global automakers have been pushing major investments into China, the world’s largest auto market, attracted by years of double-digit sales growth but they find themselves under increasing pressure as the local economic growth settles to a slower growth. Additionally, local auto brands have started recuperating the lost market share by introducing numerous entry-level SUV models, with the segment outpacing the general market growth.