General Motors (NYSE: GM) said that its sales in China rose 0.7% in the second quarter, as a surprising slump in Buick sales nearly offset good growth at its Chevrolet and Cadillac brands.
Year to date through June, GM's sales in China grew 4.4% versus the first half of 2017.
Continue Reading Below
The raw numbers
Here's a look at how General Motors' brands fared at retail in China in the second quarter and first half of 2018.
|Brand||Q2 2018||Change vs. Q2 2017||H1 2018||Change vs. H1 2017|
While Buick slides, Chevy and Cadillac shine
The big surprise in GM's report is the 16% decline in Buick sales. The slump is surprising because Buick has long been GM's China powerhouse, a perennial best-seller that Chinese folks associate with key moments in the country's history.
GM didn't offer much of an explanation as to why Buick sales were down from a year ago. It said that the brand's GL8, an upscale China-only Buick minivan, continued to sell well. It also noted that it just launched an all-new version of the "classic Excelle," a lower-priced compact sedan that has historically been Buick's volume leader in China; that could help give the brand's sales a boost in the second half.
Buick's recent slump is the exception to what has been a good stretch of growth for most of GM's other brands in China. Sales at Baojun, a low-cost brand created to compete directly with domestic Chinese automakers, grew 6% on continued very strong sales of the 510 SUV and of the 310 family, a compact sedan and a wagon introduced earlier this year.
Chevrolet continued to do well in China on the strength of its sedans -- and increasing demand for its Equinox crossover. Sales of what GM calls the "Malibu family," which includes a version of the current U.S. model as well as a lower-priced variant adapted from the last-generation car, grew 29% in the second quarter.
At the other end of the market, Cadillac continues to be a nice story for GM in China. Sales of the XTS sedan, which has been a hit in China for a few years now, rose 14% to over 17,000 units in the second quarter -- roughly matching the model's U.S. sales over the same period. Also performing well in China: the midsize XT5 crossover SUV, and the big -- and expensive -- CT6 luxury sedan.
Why GM is succeeding in China and Ford isn't
GM's ongoing success in China stands in sharp contrast to the struggles of old Detroit rival Ford Motor Company (NYSE: F). Ford's sales fell 25% in the first half of 2018, as the Blue Oval struggled with a lack of interest in what Chinese buyers see as an out-of-date product line.
China's auto market is the fastest-moving in the world, but GM long ago mastered the art of keeping Chinese buyers interested with a steady stream of new and revamped vehicles. The Excelle is the most recent new model, but there are more coming soon: GM plans to introduce 10 new or refreshed models to China by the end of the year, including several new entries in hot SUV and luxury segments.
While a trade war between the U.S. and China could turn this story in a very different direction, GM seems to be doing what it needs to do to remain a major player -- and generate solid profits -- in China's huge new-car market.
10 stocks we like better than General MotorsWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and General Motors wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of June 4, 2018