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GM and Ford quarterly sales continue to slump in China

BEIJING — General Motors and Ford announced their quarterly sales in China fell, albeit at a slower pace sequentially, as the U.S. automakers were hit by a slowing economy amid the Sino-U.S. trade war. GM's vehicle sales in China for the quarter ended June 30 dropped 12.2%, while Ford's sales slumped by 21.7%. While GM also suffered from heightened competition in its key mid-priced SUV segment, Ford was hurt by the limited new models for customers to choose from. For the first quarter of this year, Ford's sales in China tumbled 35.8 percent while GM's skid 17.5 percent. Still, the numbers from GM, the second biggest international automaker in China by sales, and Ford portend more uncertainty for the industry which is trying to rebound from a downward spiral that led to its first annual sales decline last year in more than two decades. GM delivered 1.57 million vehicles in China in the January-June period this year, while Ford delivered 290,321 vehicles. China's factory activity shrank more than expected in June, highlighting the need for more economic stimulus amid higher U.S. tariffs and weaker domestic demand. Annual car sales in China fell last year for the first time since the 1990s, and they are expected to fall this year too. Sales tumbled 16.4% in May from the same month a year prior, the China Association of Automobile Manufacturers (CAAM) said. That marked the 11th consecutive month of decline and followed falls of 14.6% in April and 5.2% in March. U.S. car companies' share of total China passenger vehicles sales fell to 9.6% in the first five months of this year from 10.9% in the year-ago period, according to CAAM. Over the same period, German car makers' share has risen to 23.3% from 20.9% and Japanese auto makers' to 21.3% from 17.3%. CAAM is set to announce June sales next week, which industry analysts forecast will be negative.   New models In China, GM has a joint venture with SAIC Motor Corp, in which the Buick, Chevrolet and Cadillac are made. It also has another venture, with SAIC and GuangxiAutomobile Group, in which they make no-frills minivans and have started to make higher-end cars. Sales of GM's affordable brand Baojun dropped 31.8% for the latest quarter. But luxury brand Cadillac's sales jumped 36.6%. GM sold 3.64 million units in China last year, down from 4.04 units in 2017. Ford makes cars in China through its joint venture with Chongqing Changan Automobile Co and Jiangling Motors Corp (JMC).

GM exploring ways to raise half-ton Duramax diesel tow rating

Lots of truck owners cheered when GM announced fuel economy numbers for the 2020 Chevrolet Silverado with the 3.0-liter Duramax diesel inline-six. Even after Ram let loose its EPA mileage ratings for the 2020 Ram 1500 EcoDiesel, the Chevy oil-burner still took the trophy. The victory was years in the making, GM engineers spending an entire four-year development cycle refining the LM2 Duramax to increase mileage. The tradeoff, as well all know by now, is towing; the Duramax in half-ton duty pulls a maximum 9,300 pounds in the Silverado. Rivals across town can do more, the Ford F-150 PowerStroke rated at 11,500, the Ram 1500 EcoDiesel game to pull 12,560. GM engineer John Barta told Muscle Cars & Trucks that more hauling chops could be on the way, explaining, "We’re actually looking at upgrading some of the materials around (the engine bay) to see if we can maybe raise our tow rating." Engine bay materials are at issue due to thermal complexities underhood. John Barta, GM's assistant chief engineer of diesel engine controls, said the Duramax's inline-six configuration allowed engineers to get emissions hardware like the combined selective catalytic reduction, diesel oxidation catalysts, and diesel particulate filter unit closer to the engine, where it heats up quicker, getting emissions down quicker. But that filter puts another heat source in those confines, enforcing a cap on the tow rating to keep the engine and other systems from overheating. "If you look under the hood," he said, "youÂ’ll see a significant amount of silver ‘moon tapeÂ’ around to make sure things arenÂ’t getting overheatedÂ… if we were to go up in higher towing, which we can, we start impacting the possibility of deteriorating some of the components.” There isn't much space for more grille, so swapping for a better grade of "moon tape" or a different kind of material could reduce engine bay heat, extracting a higher tow rating in the process.  It's important to note a point Barta's been making for months about the Duramax figures, though. "Even though itÂ’s nice to brag about big numbers, in reality, light duty customers are not towing that large with their trucks," and, "We do know that (95 percent) of our light duty customers donÂ’t tow over 9,000 pounds." On our First Drive of the 2020 Silverado diesel we called out the tow rating, but emphasized that the Chevy and GMC have more important challenges to overcome.

General Motors shaking up its marketing... again

One of the things that dogs the full comeback of General Motors is the instability of its marketing. That part of the automaker got yet another big shakeup today when GM confirmed what I have been tweeting for a few days - strong rumors that the Chevrolet and Cadillac ad accounts are walking to new ad agencies.
Cadillac, GM's luxury brand, is going into review from Fallon Worldwide, Minneapolis and the indications are that Campbell-Ewald, Chevy's old ad shop, will end up with most or all of it. C-E just announced that it was moving from its long-time home in Warren, MI to a new downtown Detroit office next to Ford Field, just blocks from GM.
The other shoe to drop shortly will be the shift of GM's most important brand, Chevy, from Goodby, Silverstein & Partners of San Francisco to McCann-Erickson of Troy, MI. McCann used to be the agency for Buick and GMC, as well as GM's corporate advertising, and has retained some pieces of business over the last few years. Sources have even told us that it was McCann that did a lot of the creative work on Chevy's new ad platform, Find New Roads. (Not to be confused with a former McCann tagline for Saab, "Find Your Own Road.")