GM vehicle sales in China drop 35.5% year over year

Yahoo Finance's Pras Subramanian discusses China sales for GM brands including Chevrolet and Buick as well as the outlook for its EV and hybrid sales.

Video Transcript

[MUSIC PLAYING]

BRAD SMITH: Shifting gears to GM, everyone, after the company reported a 35% drop in Q2 China sales to just over 484,000. This is the automaker's lowest China sales since the beginning of the COVID-19 pandemic.

Joining us now to discuss is Yahoo Finance's Subramanian. Pras?

PRAS SUBRMANIAN: Hey, man. So this is sort of like, like you said, are things getting worse in China, are they improving? GM with kind of, sort of a bad Q2 there. You saw that 35% drop, lowest since the pandemic began in January, 2020-- sorry, 2021. So a lot going on with GM.

I want to look at some of the brands that, actually, were taking a hit here. So take a look at Buick. That's one. That's a big brand in China, down 43%. There's also Chevrolet 37%, Cadillac 42%, and then also Wuling down 22%. So a lot going on there with GM. But I think we want to highlight some things that they said in the release about that Q2 was that things are improving.

May was actually a stronger month for GM brands in China. So that's a good thing. And then also, they saw a higher sell-through with their NEV, or new energy vehicles, that's plug-ins and electric vehicles, up 13% last quarter. So there there's some positive highlights there, some good things there. But overall, just a bad quarter for GM.

And something that we've seen with Tesla having to shut down their factories, a lot of the COVID impact of component shortages, so a lot of that happening there. Potentially getting better though, as we move into Q3.

BRAD SMITH: Is there anything to suggest that there's going to be a change in the type of financing practices that companies like GM, like Ford have in the face of, perhaps, some of these sluggish sales that we've been monitoring?

PRAS SUBRMANIAN: I'm not aware of how they actually market that from a financial point of view. But we did see this morning that the Chinese government cut the actual tax on certain EVs and certain cheaper cars. That will help GM's lower brands like Chevy and a host of other companies like Li Auto and Xpeng and things like that sell the cheaper types of EVs in China. So we'll see that help from a financial point of view.

But I still think that there's still just broader issues of just gaining supply, getting people out of their homes, just spurring demand in a place where the broad parts of the country were shut down for a large part of the spring. So this is kind of a return to normalcy here, and maybe some car buying as well.

BRAD SMITH: Yahoo Finance's own Pras Subramanian breaking down all things autos for us. Appreciate it, Pras.