US auto sales appear to be booming in China with the Ford Focus taking the position as the best-selling sedan in China last month and GM setting a new sales record in September. GM has been making a concerted effort to win over wealthy Chinese consumers, and, according to Justin Hyde, the managing director of Yahoo Autos, it’s paying off.
As he said, “Right now half of GM’s sales in China come from Wuling, its joint venture brand with Chinese partners. GM wants to boost Cadillac and its other luxury models. The company is starting to build Cadillacs in China that are designed for the Chinese market.”
China is currently the largest market for new auto sales in the world. Ford is looking to double its share of the Chinese auto market to 5% from its current 2.5% by the fourth-quarter of the year. As Hyde said, “Ford is competing against a very crowded field of foreign and Chinese built competitors but Ford is getting a break. There is a new nationalistic streak that is pushing Chinese buyers to homegrown brands. The streak is hurting Japanese competitors and helping Ford.”
All eyes in the Chinese market are now on Tesla’s Model S. While they have recently blogged that reservations are being taken for their Model S electric car, Hyde explains that things aren’t so simple. As he said, “Tesla has a lot of opportunity in China but the trick will be how it gets in there. The Chinese government controls access to its markets very tightly. It requires automakers who want to build in China to have a joint venture partner so the Chinese auto industry can learn and eventually build its own vehicles. Tesla has to consider whether it wants to partner and share its technology with a Chinese firm.”