While Doldrums Continue in USA

[Z-06]

[source: Wall Street Journal]

GM's China Sales Hit Monthly Record in April

BEIJING -- General Motors Corp. said its sales in China hit a monthly record in April, rising 50% from a year earlier on strength in its Buick and Wuling brands.

The strong performance in China by the U.S. auto maker, until recently the world's biggest by output, contrasts with its struggles in its home market. GM is racing to restructure outside of bankruptcy court in the U.S., and is expected this week to accelerate talks with the United Auto Workers union and move toward closing about 2,600 dealerships.

GM, which posted record China sales of 151,084 units in April, has two joint ventures in the country: passenger-vehicle maker Shanghai General Motors Corp., a 50-50 venture with Shanghai Automotive Industry Corp., and mini-commercial vehicle maker SAIC-GM-Wuling Automobile Co., a three-way partnership with SAIC and Liuzhou Wuling Motors Co.

The popularity of GM's smaller vehicles in China underscores the impact of government measures to boost demand for autos, said CSM Worldwide analyst Yale Zhang. China in January halved the purchase tax to 5% for vehicles with engines of 1.6 liters or less.

Sales of the Buick Excelle sedan, which is available with a 1.6-liter engine, more than doubled to 22,078 units in April, GM said. It also sold more than 50,000 units of the Wuling Sunshine minivan.

Mr. Zhang said GM's sales were also lifted by the launch of the Buick Regal midsize sedan in March and the Chevrolet Cruze compact sedan in April.

But the boost from government incentives, which also include subsidies for rural residents to purchase fuel-efficient vehicles, will likely wear off in late June, Mr. Zhang said. "The traditional weak season will start," he said.

About 9.4 million vehicles were sold in China last year, a 6.7% increase from 2007. Sales began weakening in July but improved this year, rising 3.9% in the first quarter to 2.7 million units.

GM's sales in the U.S., meanwhile, slumped 33% from a year earlier in April to 172,150 units. Overall light vehicle sales in the U.S. fell 34% last month, according to Autodata Corp.

[Teh Ricer Civic!]

This is eventually going to nip GM in the butt when Shanghai shanghais their designs and competes directly with GM.

[pow]

This is eventually going to nip GM in the butt when Shanghai shanghais their designs and competes directly with GM.

SAIC is a well-established public company, and they've been doing joint ventures with GM and VW for decades and that hasn't happened.

Their own brands - Roewe, MG, and SsangYong - aren't clones of existing vehicles, unlike smaller Chinese manufacturers.

[the_yellow_dart]

On a slightly related note:

It's the equivalent of Daddy cutting off the trust fund. Could America even deal with this if it happened?