Who is the world No.1 carmaker? Ask Chinese microvans

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To me it is incredible that a Chinese micro van manufacturer focusing on domestic rural market will has made it to the list of global carmakers. This manufacturer is Shanghai-GM-Wuling, which is short for SAIC General Motors Wuling a three way tie up which sees GM have a 44% stake in the Chinese brand. Wuling is based in the sleepy town of Liuzhou, Guangxi Province, one of the poorest provinces in China and light years away from the glitz and glamour of GM’s Chinese home in Shanghai.

Last month, General Motors claimed that it had sold 9.03 million vehicles in 2011, while Volkswagen announcedthey had sold 8.16 million units– 0.87 million less than GM. However, Volkswagen is still keen to become the World’s No.1 automaker, VW pointed two details: First, sales of its commercial vehicle subsidiaries, MAN and Scania, are excluded, which has made the group sales decrease a couple of hundred thousand. Second and more importantly, sales of Wuling branded vehicles should not be included by GM global sales. Without the might of Wuling, General Motors will lose its crown inevitably.

Wuling has sold more than 1.3 million vans and cars in 2011, the Wuling Zhi Guang, a cheap micro van measuring less than 4 meters and priced around 40k RMB (€4.8k) has achieved an incredible sales volume of 534,000 units. Wuling’s first ‘international’ sedan, the Baojun 630, which was formed as part of GM’s strategy to engage rural consumers seems to be off to a flying start, the model was introduced in August and captured sales of 8,000 units in December and ranked up sales of more than 20,000 units since its launch. In other markets, Wuling’s are under going a transformation, a demand for small vans such as Wuling’s products are higher than expected but by being part of the GM empire Wuling’s become Chevrolet N200.

From view of sales, SGMW is really a strong carmaker, but it is not built by GM itself. As one of the oldest carmakers in China, Wuling introduced the minivan from Japan in 1987 and became one of five famous minivan manufacturers in the 1990s which saw Wuling, Changhe, Chang’an, Songhua River and Tianjin-Daihatsu duke it out in the Chinese market until the rise of the personal automobile. In 2002, Shanghai General Motors came and established SGMW. Even today, cheap minivans are still its major products, which have little technology from GM. Shanghai Automotive holds a stake of 50% of the joint venture, while General Motors has 44% now.

 

Let us try to answer the question: Should SGMW be one part of General Motors’ global sales? First, General Motors is one of SGMW’s shareholder, but less than 50%. Second, Wuling is a domestic brand built by the former Chinese company, but its minivans are being sold oversea as GM’s global brand – Chevrolet. Thirdly,Baojun is a new car brand absolutely held by the joint venture, but it shares GM’s global platforms and technologies. The question is too hard to answer and the answer too vague.

If we count sales volume by the percentage of stake, things seems easier. Every carmaker’s sales will decrease sharply, because they are forbidden to hold more than 50 percent of any Chinese-based car-manufacturing joint venture, so their Chinese sales will drop at least by a half. Worse, carmakers’ sales also have to distribute to every other shareholders, including consortiums, small companies and even individuals. Sales by the percent of stake can do nothing but make things more complicated.

As a matter of fact, the uncertainties of car sales counting not only appear in China. For example, should Mazda be one part of Ford’s sales is also worth discussing, because of China’s special automotive policies, these uncertainties appear more often.

More interestingly, SAIC and Dongfeng also claim they are global top ten car manufacturers, but it is barely acknowledged. Most of SAIC and Dongfeng’s total sales come from their joint ventures, like Shanghai GM, Shanghai VW, Dongfeng Nissan, Dongfeng PSA, etc. But these sales have been counted by GM, VW, Nissan, PSA… SAIC and Dongfeng have sold nearly 200,000 cars under its own brand in 2011 (this figure excludes Dongfeng’s commercial vehicles), which is less than Volkswagen Bora – a single model’s sales in China.