General Motors Co. reported a second month of sales declines in China, its largest market, despite cutting prices on 40 models across its Buick, Chevrolet and Cadillac brands.
GM and its China joint ventures sold 252,567 vehicles in May, a drop of 4 percent from a year earlier, according to a statement on its website. The decline was mainly due to a changeover and phasing out of older models, the company said.
Foreign automakers have come under increasing pressure in China as economic growth slows in the world’s largest auto market and local brands gain market share by offering cheaper sport-utility vehicles. Passenger-vehicle sales rose at the slowest pace in five months in April, with most of the expansion coming from local brands.
“Consumer sentiment has been at a low point, and when 80 percent of your buyers are first-time buyers, it is easy to postpone purchases,” said Janet Lewis, an analyst at Macquarie Group Ltd. in Hong Kong. “GM is not at a particularly good place in its model cycle.”
GM cut prices in China last month following a decline in deliveries in April. Its joint venture with SAIC Motor Corp. announced price cuts of as much as 53,900 yuan ($8,700).
That didn’t prevent Buick and Chevrolet deliveries from declining 13 percent and 2.2 percent, respectively. The automaker will produce more of its Envision SUV, which sold a monthly record of 11,556 units. Cadillac climbed 11 percent, while sales for GM’s low-cost Baojun brand jumped almost fourfold.
For the first five months, GM’s sales in China rose 5.1 percent to 1.47 million vehicles. The company expects annual growth of about 6 percent to 8 percent.
“China’s vehicle market continues to grow at a moderate pace,” said Matt Tsien, head of GM’s China operations.
— With assistance by Tian Ying