General Motors Co. (GM) is sacrificing profit margins to maintain market share in China, cutting prices of low-cost minivans by as much as 15 percent to offset slowing sales in the world’s largest vehicle market.
Propping up minivan sales through sticker-price reductions is crucial for helping Detroit-based GM remain the top overseas automaker in China, ahead of Volkswagen AG, after the government ended stimulus programs and local authorities restricted purchases to curb highway congestion. “GM does not rely on the minibus for profit,” said Jenny Gu, a Shanghai-based analyst with industry researcher J.D. Power & Associates. “They only contribute volume.” Industry sales of the vehicles -- nicknamed “bread trucks” for their boxy shape -- fell more than 10 percent in the first seven months of this year, according to the China Association of Automobile Manufacturers.
Sales at GM minivan venture SAIC-GM-Wuling Automobile Co. declined 3 percent in the same period, according to the company. The venture dropped the price of its Wuling Sunshine minivan, China’s most-popular vehicle last year, to 28,000 yuan ($4,384) from 33,000 yuan earlier this year, according to GM.
About Me
- Marc A. Ross
- Washington, DC, United States
- Marc has an extensive background in business development for companies as well as directing the advocacy operations, communications efforts, fundraising programs and public affairs for nonprofits, corporations and political campaigns for the highest offices in the United States and the United Kingdom. Marc is available for consulting, workshops, panels, interviews, training sessions, advice, commentary and speaking on all things Advocacy 2.0. Marc can be reached via email by sending a note to marc (at) 2ndsix.com or by twitter at @microadvocacy.
