General Motors Co. and its joint venture partners sold 3.87 million vehicles in China in 2016, a jump by 7.1 percent from the previous year. The 2016 sale will cement the most populous country’s position as the Detroit, Michigan-headquartered automakers top market for a fifth consecutive year.
In October 2016, General Motors China sales were up 5.7 percent year-over-year, as it sold a record 345,733 vehicles. China happens to be the largest sales market for global automakers like Ford Motors Co. and GM, who’re enticed by the country’s move to cut down taxes on small-engine cars.
The strong sales are coming as automakers are dishing out incentives to create demand in the buyers’ market. The incentives are also necessary to keep attracting buyers to dealerships, in spite of years of consecutive growth.
In 2016, sales of GM’s pocket-friendly Baojun brand, develop for China in a JV with SAIC Motor Corp Ltd. and Guangxi Automobile Group Co. Ltd. increased nearly 50 percent. The GM’s China sales helped spur growth, as the automaker pledged to introduce more models in the fast-growing sport-utility vehicle and multi-purpose vehicle segments by 2020.
Demand for cars intensified through the second half of last year as consumers sought to buy ahead of a planned expiry of the tax incentive at the end of 2016. The tax cut halved the purchase tax on cars with engines of 1.6-ltrs or smaller to 5 percent.
The tax cut will rise to 7.5 percent this year and will return to 10 percent in 2018 – a move which will prevent a steep decline in car sales.
General Motors Co produces vehicles in China through a joint venture with SAIC, the country’s largest automaker. It’s a three-way partnership with SAIC and Guangxi Automobile Group, (née Wuling Motors).