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Don't sneer at Wuling's microvans -- they should count as GM sales
January 26, 2012
DAVID SEDGWICK

So which company is the world's largest automaker -- Volkswagen or General Motors?

A deceptively simple question. Last week, GM announced that it had sold 9.03 million vehicles in 2011, while Volkswagen says it sold 8.16 million units.

So GM is the winner? Not so fast. VW notes that its commercial truck subsidiaries, MAN and Scania AB, also sold a couple of hundred thousand heavy trucks.

The tally is also muddled by how you count sales from joint ventures, who controls the joint venture, and what type of vehicles are produced by the partners.

Some of GM's rivals note that the automaker's global sales included 1.2 million vehicles produced by one of its Chinese joint ventures, SAIC-GM-Wuling.

In China, Wuling's microvans sell for less than $4,500. These inexpensive vehicles are ubiquitous on China's rural roads. Last year, the Wuling Sunshine was China's best-selling light vehicle, with sales of about 573,000 units, according to GM.

In fact, the four top-selling models in China are all commercial microvans, according to LMC Automotive. Why, exactly, are we supposed to ignore such an important market segment? Because these vehicles are cheap?

Or is that GM has a minority stake of 44 percent in the Wuling joint venture? (SAIC Motors holds a 50.1 percent stake, while the municipality of Liuzhou, where the company is headquartered, holds 5.9 percent.)

GM bought into this venture in 2001. At the time, the company's assembly plant in the south China city of Wuling was a manufacturing relic, with dorms for the workers and a coal plant for power.

The company had phased out tractor production, but it had no money to pay for a redesign of its microvan, which was based on a 15-year-old Mitsubishi vehicle.

GM brought in professional managers, and it built a new engine plant for its joint venture. But GM did not automate Wuling's vehicle assembly line. That allowed the partnership to hold down production costs. As a result, the company's microvans cost about as much as they did a decade ago.

Wuling is growing. When GM invested in the company, Wuling sold about 100,000 vans per year.

Now, annual sales have topped 1.2 million units, and the venture is exporting vehicles to South America and Asia. This year, Wuling vehicles will go on sale in India, which ought to be a promising market.

The venture also has successfully launched its new Baojun line of passenger cars for the entry-level market.

As one might expect, Wuling doesn't enjoy fat profit margins in this price-sensitive segment. According to J.D. Power, the partnership generates an average profit of 2,000 yuan ($320) per vehicle.

MORE AT: http://www.autonews.com/article/20120126/BLOG06/120129924/1131

 

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It seems like the fairest way to count vehicles for joint ventures is to do so based on the percentage a company owns. For example is GM owns 44% of Wuling and they sold 573,000 units, GM would be credited with 252,120 units. Bet that's how they split the money so why not credit the vehicles the same way?
 

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A few years ago I would have argued this. But Wuling is now integrated with GM's design centers. The Hongtu small van and Honggaung basic MPV were designed by Wuling (as opposed to being based on licensed products) and will soon be commonplace in developing markets as Chevrolets. Even the Baojun will be finding its way outside of China as a Chevrolet. I say it's fair to include Wuling as a legit part of GM.
 

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Big whoop.

Worrying about who is number one is why Government Motors exists today. Fools that get a hint of being number one make stupid decisions to reach for the goal and that will ruin them. Fools gold.

Nothing in China should count as a sale for any brand - don't be fooled - nothing in China belongs to anyone other than to the Chinese government. There is no free enterprise in China - just the appearance of it. At any point, because of the mandate that a FOREIGN company has to partner with a CHINESE one, China can nationalize those assets (and will do so) when it needs to. Don't be fooled - those nice new factories that build Buicks will be building army vehicles when the time comes.

So if you want to count any Chinese sales as Government Motors, then go for it - you are fooling yourselves on so many levels. Meanwhile Ford remains far more profitable per vehicle sold than Government Motors.
 

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Most of the Wuling vans would be used for both work and for the family. The cost they show above doesn't include a plate for it which are getting more expensive as the number of cars increase. Wuling make probably eight different vans, a number of light utes plus one micro car. T-rex's point about the Baojun is valid.
 

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What the...?

OHHHH! I thought you said Wuling Microwaves! Sorry, my bad!! :fall:
 
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