Riding on the success of the Chevrolet Cruze and the recently introduced Cadillac brand in China, General Motors Co. said it expects to deliver more than the 3.16 million cars it sold in the world’s largest auto market last year through its local joint ventures. But Chinese demand for the company’s core Chevrolet and Buick business is cooling as consumers move toward competing Ford Motor Co. and Volkswagen AG brands. This means GM won't regain its position as China’s largest foreign automaker that it lost to Volkswagen last year, ending its nine-year reign.
The head of GM’s China operations, Matt Tsien, said the second-generation midsize Cruze is key to achieving the company's sales goals in China, the Wall Street Journal reported. "We definitely need the Cruze to be successful," Tsien told the newspaper on Wednesday.
GM, which is facing a costly recall fiasco in the U.S., is counting on China sales to help offset some of those problems. The Detroit automaker is also facing increasing competition from crosstown rival Ford and the enduring challenge from Germany's Volkswagen, the carmaker with the longest history in China. Luxury cars produced by Volkswagen's Audi division are popular among affluent Chinese.
GM is hoping its decades-old luxury Cadillac brand, first introduced in China last year, will help North America’s biggest car company gain market share in the important luxury segment. Cadillac sales, which have been flagging in the U.S., are expected to be up this year by 40 percent, to 70,000 cars. GM expects China could surpass the U.S. to become the biggest luxury car market in 2016, Tsien said.
Toyota Motor Corp. has said the company is cutting its China annual sales forecast by 6 percent, citing a cooling Chinese economy.
GM has several joint ventures in China, which require foreign automakers to form partnerships with domestic companies as part of the country’s efforts to improve its domestic auto manufacturing through these cooperative agreements. Foreign automakers, in turn, gain access to the burgeoning domestic car market, where consumers prefer foreign brands if they can afford them.
GM makes Buicks, Cadillacs and Chevrolets through Shanghai GM, a joint venture between the U.S. automaker and Shangahi-based SAIC Motor Corporation, China’s biggest automaker. SAIC-GM-Wuling Automobile produces Wuling and Baojun-branded commercial and passenger vehicles, while FAW-GM makes commercial pickups, vans and heavy-duty trucks.