GM sales in China hit by COVID lockdowns

Pras Subramanian
·Senior Reporter
2 min read
6
In this article:

It was a rough quarter for General Motors’ (GM) China unit in Q2, but the situation may be turning a corner.

GM and its various China joint ventures, which operate brands like Buick, Chevrolet, Cadillac, and Wuling in China, reported sales dropped 35% from a year ago to 484,200 vehicles. It was GM’s worst sales quarter in China since the first quarter of 2020, when China was in the throes of the COVID-19 pandemic.

Across the brands, here’s what GM reported compared to a year ago:

  • Buick: down 43.1%

  • Chevrolet: down 36.7%

  • Cadillac: down 42.2%

  • Wuling: down 22.7%

  • Baojun: down 78.5%

The big drop in sales in Q2 versus last year reflects the economic damage done in China as COVID-19 surged again in various parts of the country, as factories were shut down, people were told to shelter in place, and supplies and materials dwindled.

GM’s China Q2 sales report follows the company’s disclosure last week warning of a hit to profits in Q2 due to component shortages and missing parts, though the automaker did maintain its full-year guidance.

Despite the declines, the automaker said in a statement that it “stayed resilient and [is] focused on resuming production and operations” in China and that sales were actually recovering in May. GM also said sales of “new energy vehicles” (NEV) grew 12.5% from a year ago, reflecting China’s still strong appetite for EVs (electric vehicles).

From a macro perspective, good news came for automakers in China today with the government promising new measures to stir EV demand, including a potential tax break for EVs, and plans to make new charging stations and reduce charging fees. Additionally, the government may now cancel its plans to restore a tax levied on fully and partially electric vehicles.

Shares of GM, as well as Chinese automakers like Li Auto (LI), Xpeng (XPEV), and Nio (NIO) were moving higher in midday trade.

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Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.

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