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GM's China sales take 43% hit in first quarter

Kalea Hall
The Detroit News

Detroit — In the first quarter, General Motors Co. sold fewer vehicles in China, its largest retail market, than it did in the U.S. as it dealt with the effects of the COVID-19 virus outbreak there.

GM saw a 43% decline in its China auto sales from January through March with 461,716 total deliveries, the Detroit automaker said Friday. GM sold 618,335 vehicles in the U.S. during the first quarter. GM doesn't break sales down by month, but in February the overall market saw an 80% plunge in sales, according to data from the China Passenger Car Association.

GM auto sales fell 43% decline in China auto sales from January through March because of the coronavirus outbreak.

"What strikes me about this is that every automaker in China is in the same boat across the board," said Michael Dunne, CEO of Chinese automotive adviser ZoZo Go LLC. "In the first quarter sales were down between 40 and 50%, so GM, in that respect, is no exception." 

The massive sales decrease in China, GM's largest retail market since 2012, will likely translate to the U.S. market during the second quarter as the nation grips itself for more weeks in isolation to flatten the curve of the spreading coronavirus.

Automakers and their suppliers in the U.S. have shut down production most likely until the end of the April. China, meanwhile, is in recovery mode as plants slowly restart production and some people venture out to showrooms. 

"There were signs of improvement in March, but it’s going to be gradual," Dunne said. "There's a will on the part of the manufacturers to bring customers back to the showrooms. The customers may have some appetite, but they need to be convinced."

As it moves to restart plants, GM said it plans to maintain its focus on electric vehicles in China as well as the introduction of luxury vehicles and midsize/large SUVs, the segments with the strongest increase in customer demand.

The coronavirus' effects on auto sales has already been felt here in the U.S. GM's sales dropped 7% in the first quarter;  Ford Motor Co.'s fell 12.5%; and Fiat Chrysler Automobiles NV's declined 10% for the first quarter.

GM noted it its Wednesday U.S. sales release that the industry experienced "significant" declines because of the virus forcing people to stay home and dealerships to close. In some states with stay-at-home orders, such as Michigan, selling vehicles isn't allowed.

Dunne's firm has fielded several inquiries from U.S. dealers to see how China's dealers handled the effects of the virus and to learn new ways to adapt their business. Some dealers have already implemented new tools to grab customers virtually and deliver vehicles for test drives. 

"There is a precedent for them to refer to and look at," Dunne said. ""The automakers are going way out of their way to do what they call contactless sales and service."

To connect with customers during the outbreak in China, GM adopted new sales channels and methods such as livestreaming and touch-free vehicle services. 

Zhejiang Geely Holding Group Co., known as Geely, is owner of Sweden's Volvo Cars Ltd. It delivered cars to people's driveways and used drones to deliver keys. 

Automakers in China are using a "full arsenal of tools" to make sales, including discounts and incentives, and some cities have waived fees that come with buying a new car, but demand remains soft, Dunne said: "There's efforts from north to south, east to west to get that customer back into the grove of buying new cars." 

Ford China sales will be released April 10.

khall@detroitnews.com

Twitter: @bykaleahall