The world’s leading automotive market is witnessing a tough time, which some industry experts call it as biggest downturn in two decades. Foreign manufacturers, such as General Motors, have so far been able to withstand the storm, but others, such as Ford, have seen their businesses in the region deteriorate.
China is the world’s largest automotive market, with approximately 28 million vehicles sold in 2018, according to IHS Markit. This figure is compared with the expected 17 million in the United States, the second largest car market in the world.
Car sales in China fell 14% in November compared to the same month in 2017, the Chinese Association of Automobile Manufacturers announced. This continued the general downward trend in the country, begun in July, but the fall in November is the worst of the year.
General Motors announced record revenue of $ 500 Million in China in the third quarter of 2018, despite a challenging environment. The company expects to generate $ 2 Billion for the entire 2018 period in the region. GM informs its revenue as “stock revenue” as a result of its agreement with its joint venture partner, the Shanghai Automotive Industry Corporation. In China, all foreign car manufacturers have to cooperate with local manufacturers.
On the one hand, GM saw sales of a number of profitable vehicles increase. The sale of Cadillac, GM’s luxury brand, grew 20% in the third quarter, with a strong product mix up.
But retail sales fell 15% in the same quarter. Dhivya Suryadevara, GM’s chief financial officer, said the automaker recorded the largest volume declines in China’s third to fifth tier cities, which are normally less inhabited areas and smaller economies.
Despite the latest slowdown, there is still much room for development for the country. By 2024, IHS expects car sales in China to reach about 33 Million units.