GM China Sales to Exceed 3.1M in 2014


Share price of General Motors Co. (GM) increased 1.3% to $33.65 on Sep 24, after the automaker announced that it expects to sell over 3.1 million vehicles in China in 2014. With this, the company’s 2014 China sales will be a little more than the 8% to 10% growth expected in the Chinese auto market.

If achieved, this figure will mark the second straight year of such massive sales for the automaker. General Motors’ 2013 sales also totaled 3.1 million vehicles, which highlighted an 11.4% year over year rise.

General Motors and its joint ventures witnessed a 14% year-over-year increase in sales in China to 280,178 units in Aug 2014. Sales in the first eight months of 2014 surged 11.1% to reach 2,261,194 units.

Moreover, General Motors expects total sales since 1999 to reach 20 million units this year. Sales of Cadillac brand is expected rise to about 70,000 vehicles this year. The company revealed that its sales were not affected by the anti-monopoly probe by Chinese regulators.

Recently, to meet the rising demand in the luxury vehicles segment, General Motors launched a remodeled version of Cadillac in China. With this, the automaker intends to capture the potential luxury car market of the nation. Further, General Motors intends to launch 60 new or refreshed vehicles in China between 2014 and 2018 and 11 new utility vehicles over the next 5 years.

General Motors focuses on emerging markets, particularly Brazil, China and India, to boost its global sales by increasing capacity investment to meet the growing demand. It sells vehicles in China under brands Chevrolet, Buick and Cadillac. The company faces stiff competition from Volkswagen AG (VLKAY) and Toyota Motor Corp. (TM) in the country.

In August, Chinese anti-monopoly regulators reportedly contacted the Chinese joint venture of General Motors as part of an ongoing investigation in the industry. Chinese authorities have launched a series of anti-monopoly investigations on some of the global automakers and technology suppliers to regulate prices and ensure value for customers. Other automakers operating in China have either lowered the price of the vehicles or spare parts following the investigation.

General Motors currently carries a Zacks Rank #3 (Hold). Tesla Motors, Inc. (TSLA) with a Zacks Rank #1 (Strong Buy) is an automobile stock worth considering.

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