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Abu Dhabi, UAEMonday 22 October 2018

General Motors' car sales plunge in China

Decline due to a "softening" vehicle market and issues shifting to a new engine system with its Buick brand, firm says

GM's new smaller Buick engine has been blamed in part for the decline. AP
GM's new smaller Buick engine has been blamed in part for the decline. AP

General Motors' quarterly sales in China fell for the first time in over a year, hit by faltering economic growth and a wider slowdown in the world's biggest auto market amid a whipsawing trade war with the United States.

The US car maker sold 835,934 vehicles in the third quarter ended September, down a sharp 14.9 per cent from a year earlier, which the firm said was due to a "softening" vehicle market and issues shifting to a new engine system with its Buick brand.

"The major reasons are a softening market, slowing lower-tier cities, Buick's engine change-over and a strong Q3 last year," a Shanghai-based GM spokeswoman said. She added the fall was not linked to trade tensions.

The decline marks the first drop since the first quarter of 2017, when GM's China sales fell 5.2 per cent. GM switched to reporting only quarterly China sales earlier this year, scrapping monthly sales figures it had previously revealed.

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China's automobile sales have been falling more broadly in recent months, with a slowing economy and trade frictions making consumers cautious about spending, an industry body said last month.

GM has been shifting its Buick cars to a new type of more efficient three-cylinder engine to meet emissions targets, which Chinese dealers said had hit sales because consumers were not yet convinced by the smaller engines.

"Many consumers still have concerns because they read negative comments about three-cylinder technology online, which aren't really fair," said a sales manager surnamed Hu at a Buick dealer in Zhejiang province.

China, the world's largest auto market, is critical for the US car maker. It sold over 4 million vehicles in the country last year, even more than it sold in the North Americas market.

GM's sales in China inched up 0.7 per cent in the second quarter of the year, slowing from an 8 per cent rise in the January-March quarter.

GM's joint venture in China, Shanghai GM, will also recall over 3.3 million Buick, Chevrolet and Cadillac vehicles from October 20 due to a defect with the suspension system, a Chinese regulator said earlier this month.

China's main car industry body, the China Association of Automobile Manufacturers, is set to reveal September auto sales later this week.