GM’s Auto Sales in China Plummet. The One Bright Spot is EVs.
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A Hummer is displayed at at a trade show in Shanghai in late 2021..
STR/AFP via Getty Images
General Motors
‘ latest figures on sales volumes in China are more evidence that the world’s largest car market was a tough one in the second quarter. Government-mandated Covid-19 lockdowns constrained production and created additional supply-chain issues for the entire auto industry.
The one bright spot for GM (ticker: GM) and the rest of the Chinese car industry was sales of electric vehicles.
In China, GM delivered about 484,000 vehicles in the second quarter, it said Wednesday, down 35.5% from roughly 751,000 in the second quarter of 2021.
Production and sales at many other auto makers was down as well.
Tesla
(TSLA) doesn’t break out figures on its Chinese production, but its total second-quarter deliveries fell about 18% to 254,695 vehicles, compared with 310,058 in the first quarter.
Tesla
’s
Shanghai plant, its most productive factory, was either shut or operating at reduced rates for most of the second quarter.
Sales at GM’s joint-venture partner
SAIC Motor
(600104.China) dropped 11.1% in the second quarter. It is a big business, with deliveries of almost 2 million vehicles in the second quarter.
Despite the drop for GM, sales of the Wuling Hong Guang MINIEV, a low-priced battery-electric vehicle built with SAIC, rose 10% from a year earlier. Based on last year’s results, that implies roughly 94,000 vehicles were delivered in the second quarter. For the first half of 2022, MINIEV volumes amounted to roughly 187,000 units, up about 19% from a year earlier.
Overall, EVs continued their growth in China despite Covid-related issues. Citigroup analyst Jeff Chung estimates that in the first half of 2022, Chinese wholesale sales of so-called new energy vehicles, a category that lumps together plug-in hybrids and battery-electric cars, rose more than 100% from a year earlier, based on Chinese industry data. He believes NEV sales volumes can rise about 67% for the full year to roughly 5.5 million vehicles.
GM stock might be getting a small bump from the China delivery news. Shares were up about 1% in premarket trading, while futures on the
S&P 500
and
Dow Jones Industrial Average
rose 0.4% and 0.5%, respectively.
Coming into Thursday trading, GM shares are down about 47% year to date. Inflation, rising interest rates, and worry about a potential recession have sent investors fleeing from automotive stocks.
Write to Al Root at [email protected]
