GM Approaching Record Sales Figures in China

Fiat/Chrysler expected to start production of Jeep Cherokee in Guangzhou.

by on Dec.05, 2013

GM's China operations are approaching the 3-million unit mark in sales for 2013: a new record.

General Motors reported its sales in China, now the company’s largest market, increased 13% in November as the company edged closer to its goals of selling 3 million vehicles to Chinese customers in a single year.

As GM is pushing toward a new record, other makers, such as Fiat SpA and the Chrysler Group, are renewing their efforts to take advantage of the growth in China. Ford, a late entrant, has committed billions of dollars to grow in China as well with impressive results to show for that investment.

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During November, GM and its joint-venture partners sold a record 294,500 vehicles in China November and is just 115,000 vehicles short of the 3-million unit mark even as key rivals, such as Ford and Mercedes-Benz, expanded their Chinese operations and sales.

GM is contending with Volkswagen to be the top foreign automaker by sales in China and indicated it could reach its objective of selling 3 million vehicles this year by the middle of this month. The race between GM and VW in China has been close all year, but GM appears to have built an edge over its German rival.

GM will set the annual sales record amid management changes, having announced Matthew Tsien will take over as head of GM’s operations from Bob Socia when he retires on Jan. 1.

As president of GM of China, Tsien will report directly to GM Chairman and Chief Executive Officer Dan Akerson rather than the head of GM’s international operations. The change underscores the importance GM now places on its China business.

At the Shanghai auto show in April, GM unveiled plans to spend $11 billion through 2016 on expansion in China. When completed, the company estimates the four new assembly plants will boost annual capacity to 5 million vehicles – double the number of cars it sold in the U.S. last year.

VW, along with its Chinese joint ventures, will invest $24.6 billion through 2018 to expand in China.

Meanwhile, Fiat/Chrysler is looking to move into China through a new venture in Southern China. The deal is nearly complete, according to reports from Europe. The deal calls for Fiat/Chrysler to locate a new Jeep assembly near the base of the Guangzhou in the Panyu district of Guangzhou, one of China’s largest coastal cities.

The Cherokee will probably be the first Jeep model built at the plant in Panyu district of Guangzhou.

The Chinese government had approved Guangzhou Auto and Fiat’s plan to invest $770 million in a new factory, which will have an initial production capacity of 60,000 units earlier this year but the final agreement has taken several months to negotiate.

(General Motors appoints new boss for China. For more, Click Here.)

The Jeep brand is more recognizable than its Italian parent in China because it was the first Western badge built in the country. Jeep manufacturing in China ended after production shifted to Mercedes-Benz vehicles about 10 years ago by then-owner DaimlerChrysler.

For Chrysler, the deal represents a return to China. Jeep was the first foreign brand to be assembled in China in 1983. Beijing Jeep stopped building vehicles in 2006, but Daimler AG held onto the venture even after its sold Chrysler to Cerberus.

(Click Here to see Volkswagen’s new budget brand for China.)

Fiat’s Jeep push in China underscores the Italian carmaker’s growing dependence on its American unit to compete with larger manufacturers such as GM, Ford and Volkswagen. Chinese consumers are far more familiar with the Jeep brand than the Fiat brand.

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