GM’s August plunge in China highlights global woes image

General Motors announced its largest sales fall in China during the past five months after August deliveries were tallied and the drop is a signal that global automakers will be deeply challenged by the new economic realities of the world’s biggest auto market.

Deliveries for General Motors and its joint venture partners slid 4.8 percent year-on-year last month, in line with recessed numbers also reported by Ford and Japan’s Nissan. This comes to showcase how the global players will struggle to cope with the economic slowdown and equities issues that make up the economic reality of the world’s second largest economy. But in turn these figures are in stark contrast to the big sales growth registered at Toyota, Honda or Mercedes-Benz. The Chinese are still buying cars, even at slower rate, but the competition has heightened and new, top-selling products are becoming crucial now. With China’s economy predicted at slowing its growth to the smallest in 25 years and with the stock markets losing as much as 40 percent since mid-June, the automakers need to fend off with careful product and network strategies.

Mercedes for example has a newer product lineup than its premium competitors in China – with recent refreshes for more models than larger rivals Audi and BMW – and the result was obvious: August sales jumped 53.1 percent. Meanwhile Honda and Toyota have been fast to deliver sport utility vehicles and crossovers, hot selling segments in China – IHS Automotive forecasts that while the market slows the SUV sector would gain at least 20 percent.

Via Reuters