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General Motors' biggest market: China

A mechanic works on a Buick at a General Motors dealership in Shanghai in 2011. China is now General Motors' biggest market, selling more vehicles tha...
A mechanic works on a Buick at a General Motors dealership in Shanghai in 2011. China is now General Motors' biggest market, selling more vehicles than in the U.S.PETER PARKS / AFP - Getty Images

Despite signs of a slowdown in the Chinese economy, General Motors posted record sales in China -- where GM sales now have surpassed the total number of vehicles the company is selling in its home market, the United States.

GM and its Chinese joint venture partners saw sales surge by 10.6 percent during the first half of 2013, to nearly 1.6 million, an all-time record that positions it as the booming Asian nation’s second-largest automotive manufacturer. By comparison, it sold more than 1.4 million vehicles in the U.S. during the same time period.

GM isn’t the only American maker outpacing the growth of the overall Chinese market. Rival Ford Motor Co. set its own record for the first half of the year, sales in China surging 47 percent, with demand up 44 percent in June.

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While several makers have yet to report their final numbers, it appears the two American makers significantly outperformed the overall Chinese market, passenger car sales for the first half expected to be up 14 percent, with June growth a more modest 10 percent year-over-year, according to domestic industry sources.

“We have seen strong vehicle demand across China, particularly in the midsize, upper-medium, luxury and SUV segments,” said Bob Socia, President of GM China, who said that demand in June was also up 10.6 percent from last year’s previous high of 236,207 units.

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Socia forecasts Chinese demand for GM’s passenger cars and commercial vehicles will “remain robust through the end of the year.” That suggests the market will remain the maker’s largest for some time, despite the ongoing revival of the American automotive market.

That emphasizes the dramatic transition that was already underway even before GM’s transformational bankruptcy in 2009. Today, nearly three of every four vehicles the maker produces are being sold outside the United States, according to GM data.

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Ford has also been rapidly growing its foreign sales, but it lags well behind GM in the key Chinese market. The second-largest U.S. maker got off to a significantly later start in China and is playing an admitted game of catch-up, Ford CEO Alan Mulally only last month sweeping through China to announce several critical new projects, including a new $500 million engine plant in Chongqing and a major expansion of its Xiaolan assembly plant.

For the first half of the year, Ford sold 407,721 vehicles in China, with demand reaching 75,254 during June alone – both records.

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GM, on the other hand, posted a 10.6 percent gain from last year’s previous record for the period to 1.57 million vehicles. That was 10 percent better than the 1.42 vehicles GM sold in the U.S. during the first half of 2013.

The gap is likely to grow. GM has set a target of delivering more than 5 million vehicles annually in China before decade’s end. Even if the U.S. were to reach prior peaks of just over 17 million, GM would have to achieve a massive increase in its current market share to even approach 3.5 million sales in the home market, several analysts noted.

GM China President Socia said the big Shanghai GM and SAIC-GM-Wuling joint ventures, as well as five of the GM brands offered in China, all had record domestic sales in the first six months of 2013.

Buick sales in the domestic market increased 16.9 percent from the first half of 2012 to 401,327 units, led by record demand for several models, including the original Excelle family, Excelle XT and GT, Regal and Encore. Buick sales in China surpassed those in the U.S. by a margin of 4 to 1 – even though Buick sales in the U.S. increased by 11.8 percent 100,837 units, according to GM figures.

GM has 12 joint ventures, two wholly owned foreign enterprises and more than 55,000 employees in China. Passenger cars and commercial vehicles are sold under the Baojun, Buick, Cadillac, Chevrolet, Jiefang, Opel and Wuling brands. In 2012, GM sold more than 2.8 million vehicles in China.

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