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GM confident on margins despite dip in sales
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GENERAL Motors Co’s China sales last month fell 4 percent year on year, but the United States-based firm said it remains upbeat about profit margins in its second-largest market.
GM and its joint ventures sold 229,175 cars in China in the month, attributing the decline to model changeovers, it said in a statement on its website yesterday.
The July drop compares with a 0.2 percent increase in June and a 4 percent decline in May.
GM’s sales in the first seven months of the year grew 3.3 percent year on year, it said.
While industry-wide data shows car sales faltering as China’s economy grows, GM spokeswoman Irene Shen said the company expects to maintain margins of about 9 or 10 percent, in line with the goal announced by GM China chief Matt Tsien in May.
GM’s shift toward SUVs, including the launch of the Baojun 560, could negatively impact its margins in China, but a greater contribution from the high-end Cadillac brand could help to lift profits, said James Chao, Asia-Pacific head of IHS automotive.
“They have a shot at maintaining their margins at 9-10 percent if the luxury end of the market holds up,” he said.
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