General Motors Sales Surge in China on Demand for Buicks and SUVs

By Markets Fool.com

The Baojun 560, an affordable compact crossover SUV, has sold very well for GM in China. Image source: General Motors

Continue Reading Below

General Motors said that its sales in China grew 17% in May, on strong results for its premium brands and big sales of SUVs.

How GM's brands performed in China in May

In addition to its familiar Chevrolet, Buick, and Cadillac brands, GM's vast China operation also sells less-expensive passenger vehicles under its Baojun brand, and Wuling-brand commercial vehicles, mostly small vans.

Cadillac sales rose 30% from a year ago to 8,568 vehicles. That's still far short of the numbers put up by the three big German luxury-car brands in China month after month, but it's a noteworthy result. GM has made it clear that it has a long-term vision for Cadillac in China, and it has seen strong success, particularly with its crossovers and the XTS sedan.

Buick sales rose a tremendous 61% year over year, to 100,864 vehicles. Buick has long been a favorite brand of Chinese consumers, and it does especially well with its Excelle family of compact sedans and with its SUVs. The Excelles include a recently overhauled sedan (Excelle GT) and a hatchback (Excelle XT). Both are closely related to the U.S.-market Buick Verano. Excelle sales nearly doubled from a year ago, accounting for almost half of Buick's sales in China last month.

Continue Reading Below

The Buick Excelle GT is one of GM's best-sellers in China. It's a close sibling of the U.S.-market Buick Verano and Europe's Opel Astra. Image source: General Motors

Much of the rest was SUVs: Buick SUV sales were up 24%, driven by continued strong demand for the Encore and Envision. GM will launch a revamped version of the Encore in China later this month.

Sales for the affordable Baojun brand jumped 80% to 43,515, led by the Baojun 730 minivan and the Baojun 560 crossover SUV. Both have been big sellers for much of the last year.

Not all the news was good, as the Chevrolet brand continued to slip. Chevy sales in China in May fell 24% to 38,114 vehicles. Chevrolet has been hurt by the end of government incentives that favored its small Sail sedan, which was developed specifically for the Chinese market. GM just rolled out the all-new Malibu (sold as Chevy's flagship "Malibu XL") in China and plans to add several additional models to boost the brand's sales in coming months.

The Wuling brand has also had a tough time over the last year, hurt by a broad decline in demand for commercial vehicles. But things may be stabilizing: Wuling sold 104,170 vehicles in May, down 5% from a year ago.

Year to date, GM's sales in China are up 4.3% over last year's record result.

What GM said about its sales in China last month

"GM vehicle deliveries in China achieved robust growth in May," said GM China chief Matt Tsien in a statement. "While demand for our SUVs, MPVs and luxury vehicles remained strong, we also saw impressive demand for passenger car models such as the Buick Excelle GT."

The upshot: GM is doing well in a challenging market

GM is locked in a tight race with arch-rival Volkswagen for the China sales crown. Its gains in May, powered by strong demand for SUVs and the recently revamped Excelle GT, should help it keep pace in the world's largest auto market -- and should help deliver another strong profit in the second quarter.

The article General Motors Sales Surge in China on Demand for Buicks and SUVs originally appeared on Fool.com.

John Rosevear owns shares of General Motors. The Motley Fool recommends General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.