General Motors Co (GM.N) reported on Monday its biggest drop in China sales in five months for August as global automakers struggle with a deepening economic slowdown and slumping equities in the world’s largest auto market.
Vehicle sales for GM and its joint venture partners fell 4.8 percent year-on-year in August, while Ford Motor Co (F.N) and Nissan Motor Co Ltd (7201.T) also reported contracting sales for the month, highlighting the divide between winners and losers in the Chinese market.
The figures contrast sharply with last week’s major sales gains for Toyota Motor Corp (7203.T), Honda Motor Co Ltd (7267.T) and Mercedes maker Daimler AG DIAGn.DE in China, demonstrating the importance of having fresh, in-demand products to entice buyers.
China’s economy is forecast to grow at its slowest pace in a quarter of a century this year. Mainland stock markets have tumbled roughly 40 percent since mid-June after a sharp run-up that began late last year.
Mercedes offers a fresher lineup than key luxury competitors in China, having revamped many of its models more recently than Audi AG (NSUG.DE) and BMW AG (BMWG.DE) and helping to lift its deliveries last month by 53.1 percent.
And in the past year, Honda and Toyota have released hot-selling sports utility vehicles (SUVs), a segment that IHS Automotive predicts will grow by more than 20 percent this year in defiance of the auto market’s slowdown.
Automakers like GM are now trying to play catch-up.The U.S. automaker launched a new SUV in July under its Baojun budget brand, but the marquee’s nearly three-fold sales growth year-to-date hasn’t been enough to lift the company’s relatively flat 2015 sales.
The sales numbers of GM, Ford and Nissan bode poorly for overall market sales in August. Industry sales for the January to July period were up only 0.4 percent on a year-on-year basis, according to the China Association of Automobile Manufacturers (CAAM). CAAM is set to release August data on Thursday.
In July, CAAM slashed its sales growth forecast for 2015 by more than half to 3 percent, saying the stock market crash depressed consumer sentiment.
Volkswagen AG (VOWG_p.DE) is the top-selling passenger car maker in China with roughly 18 percent market share in 2014, followed by GM and Hyundai Motor Co (005380.KS).