Despite broad and deep price cuts introduced earlier in the year, GM's sales in China were roughly flat in June continuing the streak of weakness since March (when GM changed its reporting to retail sales from wholesale delivery). This is the weakest start to a year for China auto sales since 2012 and GM's share price is now back notably below its 2012 IPO price. Judging by the massive volume of cars 'parked' in GM's Shenyang Liaoning lots, it is clear that automakers learned nothing from the last "if we build it, they will come" channel-stuffing inventory surging dysphoria that, among other things, led to their last bankruptcy... if only Chinese buyers would take up the credit terms like Americans.
GM's stock is back below its IPO price...
As sales in China slump... (as Reuters reports)
General Motors Co vehicle sales in China were roughly flat for June as broad price cuts introduced earlier in the year failed to boost demand.
GM and its Chinese joint-venture partners sold 246,066 cars in June, virtually unchanged from the same month a year ago, the U.S. automaker said in a statement on Monday.
That compares with a 4 percent year-on-year drop in May sales and a 0.4 percent dip in April, when the automaker switched to reporting retail sales rather than wholesale data for China.
GM has largely failed to counteract sluggish auto sales so far despite slashing prices on 40 models in May by up to 20 percent, as China's economy grows at its slowest rate in 25 years. The automaker also faces rapidly shifting tastes among Chinese consumers, now showing a pronounced preference for small, affordable sport-utility vehicles.
As it appears there just is no more room to stuff inventories in its Shenyang, Lianing province parking lots (as China has become the new car graveyard over the last 3 years)
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And with allthis inventory, sales are a problem...
For the market overall, sales for January to May rose only 2.1 percent from a year earlier, giving 2015 the slowest start since 2012, according to the most recent statistics available from the China Association of Automobile Manufacturers (CAAM).
And finally, there is an even bigger probelm...
- *CHINA PASSENGER CAR SALES HIT BY STOCK-MARKET ROUT, CUI SAYS
- *CHINESE CANCELLING CAR PURCHASES ON STOCKS ROUT, PCA'S CUI SAYS