China, Where GM Sold More Cars In 2010 Than In The US, Sees January Car Sales Plunge 10.3%

Tyler Durden's picture

And some bad news for the world's worst car maker (recently bankrupt), which has bet its entire "growth" platform as per the recent IPO on the one market that is so far unfamiliar with said carmaker's "quality" reputation. In January, the Shanghai-based China Passenger Car Association reported that sales of passenger cars fell 10.3 percent in January from the month before to 965,238. Per "Chinese bought 13.7 million passenger vehicles last year, up by a third
from 2009. But that robust growth is forecast to cool this year due to
the expiration of tax incentives for some vehicle purchases and a
renewed effort by cities to bring traffic under control."Is the recent collectivist action to cool off purchasing actually going to have an adverse impact not only on GM's margins but its sales as well? Why yes. But the market will be stunned when this is publicly announced shortly.

Furthermore, the deterioration in car sales is accelerating:

"Of course the withdrawal of financial incentives would impact any country's auto market, and sales did continue to grow in January, but toward the end of the month there was a sharp cooling in sales," the Passenger Car Association report said.

It said sales in February were bound to decline due to the usual slump following the Lunar New Year holiday, which was longer than usual.

What's worse is that the government is now actively starting to set quotas:

The explosive growth in Chinese car ownership has nurtured the rise of the domestic auto industry, but left major cities like Beijing and Shanghai jammed with traffic and choking on smog.

China's capital has decreed it will limit new vehicle registrations to 240,000 this year -- just over a third of those registered in 2010 -- to try to ease massive traffic jams that have turned Beijing's streets into virtual parking lots.

Soon getting a car in Shanghai will cost less than getting a cab medallion in New York City:

News that Shanghai would more strictly enforce existing restrictions on
vehicles with out-of-town license plates, often bought by city residents
to avoid paying exorbitant fees in monthly auctions, boosted the
average price for a plate to 44,000 yuan ($6,666) last month, local
reports said.

And in keeping with new quotas, there go the subsidies too:

As of January, the government ended sales tax rebates and subsidies for rural buyers, which initially fueled huge growth in sales of minivans in the countryside after they took effect in 2009. That is expected to dampen demand in coming months.

But most auto manufacturers are banking on solid growth in the country's vast rural areas and inland cities, where most families do not yet own cars and those that do are keen to trade up.

And going back to the company mentioned earlier on:

General Motors Co., which for the first time in its 102-year history sold more cars and trucks in China last year than it did in the U.S., reported sales in China rose 22.3 percent from a year earlier in January to 268,071.

Ford Motor Co.'s sales climbed 20 percent, to 53,340 vehicles.

While domestic auto companies are growing quickly, they have yet to overtake foreign car makers and their joint venture partners: Six of the nine top car manufacturers by sales in January, according to the Passenger Car Association, were joint ventures, led by GM and its flagship joint venture with state-owned Shanghai Automotive Industrial Corp., Shanghai GM.

Luckily, now that the (absolutely flawed) paradigm is that the US will once again lead the world away from depression, we are confident that the government will pull another endorsed subprime bubble, and provide loans on a 120% LTV basis to buyers of GM cars. After all, all that channel stuffing that GM is engaging in month after month has to be offloaded to deadbeat consumers somehow.

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Judge Judy Scheinlok's picture




cossack55's picture

GM and Apple team up to make the icar.  A 9' long tablet with wheels. Electric of course. 

financeguru500's picture

Lol. If only GM could start making 49cc Scooters that sell for $500 a piece they could dominate the U.S. market. With the coming gas price surge they would make a fortune.

andrewjpeterson's picture

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HelluvaEngineer's picture

Obviously due to snow...

Seasmoke's picture

this cant be good for 2012 bonuses

quasimodo's picture

I'm pretty sure I read a newsbit yesterday that the fuckers are all getting an average of $4000. Glad I could be a small part of that,SOB's

hedgeless_horseman's picture
by hedgeless_horseman
on Mon, 02/14/2011 - 15:17


Learning from the bankers...

GM hourly workers get $4,000 bonuses

GM will pay most hourly workers more than $4,000 each as compensation for its strong financial performance last year, said a person briefed on the bonuses.




The person briefed on the payments did not know the total cost of the salaried bonuses, but it's likely to top $200 million. Most GM salaried workers make more than $100,000. A bonus of 8 percent, the midpoint of the range, would give them roughly $8,000.




"Since the taxpayers helped these companies out of bankruptcy, the taxpayers should be repaid before bonuses go out," Sen. Charles Grassley, R-Iowa, said in a statement. "It sends a message that those in charge take shareholders, in this case the taxpayers, for a sucker."


Just another reason why I will never buy a GM product.

Rodent Freikorps's picture

Up until the bailout, I'd never bought anything but a Chevy.

Now, I will never buy another GM product as long as I live.

papaswamp's picture

Wonder if we are seeing the first signs of the faux Chinese economy. It's gone as far as it can go. Car sales plummet...real estate is beginning to slow. What will they do with all those workers that build cities with no occupants? Something has to give....

Nobody special's picture

Non-event ppl.  This is perfectly normal due to the Chinese New Year.

eigenvalue's picture

As far as I know, a lot of buyers of cars in China are young people in the cities. Most of them earn only $200-400 per month but they borrow heavily from banks or their parents to buy luxury cars, LV bags and large apartments just to show off. They can never repay the borrowed money. 

Judge Judy Scheinlok's picture


DEFAULT = DEATH(suiside).

eigenvalue's picture

No. In China there is a saying. "Those who have borrowed money are the masters" I have numerous examples that the Chinese default on their obligations. Some people even managed to borrow large sums of money from big Chinese banks like ICBC and then used the money to buy apartments or bonds in countries like Canada, Australia or the UK. And then they emigrate to these countries through the business immigration program. The banks can never have the money back.

overmedicatedundersexed's picture

GM will be moving it's headquarters to asia by 2013..less taxes and the USA will have been fully gutted by then..UAW big wigs disband union and get jobs with GM in asia.

I hear Halliburton is very happy in ME. does not get near the negative press of just a few years ago.

MachoMan's picture

Might as well....  I'll be worried when walmart moves its headquarters there...

Oh regional Indian's picture

It is all a massively controlled market folks. All decided, Hu will be propped up, Hu will be taken down.

Price fixing, collusion, stuffing, lying.
Rampant int he incestuous Auto industry.

NUMBers mean little.

topcallingtroll's picture

China is in the early stages of a crack up boom. I suspect whatever happens in china will be ten times worse than in the usa. Price signals are suppressed and distorted and basic information such as annual steel production is a state secret. The malinvestment that can occur in such a controlled economy is much worse than ours where information is more available. At least we dont have 19 huge ghost cities.

youngman's picture

I bet the GM cars are better built in China...better workers = quality

z tranche's picture

Now, now, lay off Detroit.  Them people is living in Mad Max times.

NOTW777's picture

time for another raise for GM workers - quick, election coming up

stuff the unions

b_thunder's picture


i bet they will practice the same "channel stuffing" in PRC that they've been doing in USA

LawsofPhysics's picture

Better hold off on that profit sharing until the 40+ billion is paid back to the U.S. taxpayer.

buzzsaw99's picture

Not enough to even dent the trade deficit.

dick cheneys ghost's picture

defector says he lied to US about WMD in IRAQ.

Clayton Bigsby's picture

It must have been the snow?

Bagbalm's picture

Hey, just withdraw the US franchise authorizations and write the inventory off as bad debt. All fixed. No warranties on clearance items.

Robslob's picture

I wondered why they were in such a hurry to pay my workers...ahem...the governments...ahem...I mean GM's workers bonus with my tax dollars...

littledog94's picture

As former UAW member I know amer. auto ind. was terminal 30yrs ago.Bankster elites are almost done raping ameriCON'd ppl. and are now setting themselves up to drain PRC. PRC ppl. think they are headed for mid. class prosperity just as ameriCON;d ppl. did throughout 20th cent. How'd that work out for us.

lynnybee's picture

Is this the same GENERAL MOTORS who took $57,000,000,000 of MY TAX DOLLARS ?!   I'm still waiting for my free GM car !       Is this the same GENERAL MOTORS who took $57,000,000,000 of MY TAX DOLLARS & used it to build a new plant in BRAZIL & used MY TAX DOLLARS to make the transition from selling cars in the U.S. to selling cars in other countries at lower prices ?!       

hedgeless_horseman's picture

The very same GM.  Unlike GMAC, which changed its name to Ally Bank, GM still has the same name. 

GM's chairsatan says GM paid us taxpayers back 100% with interest.

Like all chairsatans, HE LIES!!!!!!!!!!!!!

GM just refinanced under better terms, and paid back one loan with another, from the US taxpayers.

ejhickey's picture

this story explains  why GM stock can't get above the $37-$38 range. 

Buck Johnson's picture

This whole economic game is going to end badly and they know it.

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mediaprizm's picture

China is a big market where we can grow our busines easily.

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