GM Cuts The Price On China's Top Selling Van

William Maley - Editor/Reporter - CheersandGears.com

August 29, 2011

General Motors is cutting prices of their low-cost minivans by as much as 15% to help offset slow sales in China. The company has cut prices on a minibus it builds with Wuling called the Wuling Sunshine after seeing sales drop 3% during the past seven months in an otherwise growing market. The slide isn't GM's or Wuling's fault; the cause of the slide is due to a government incentive plan that encouraged sales of commercial vehicles expiring. Due to the plan expiring, commercial sales have seen a 7% drop.

“The next 12 months look tough. Incentives brought forward buying in a very dramatic fashion in 2009, 2010, and now we are seeing a lack of pent-up demand,” said Ashvin Chotai, London-based managing director for Intelligence Automotive Asia.

The Wuling Sunshine is China’s best-selling vehicle. Formerly priced at 33,000 yuan, GM has priced the very sparsely equipped base model for 28,000 yuan, or about $4,384.

“We made some short-term focused promotions to help the overall market situation,” said SAIC-GM-Wuling vice president Matthew Tsien.

JD Power says the price cut drops the profit of every Sunshine sold; currently the Sunshine generates about 2,000 yuan ($313)for SAIC-GM-Wuling.

GM also hopes the price cut can help them stay as China's top automaker. Currently, GM has sold 1.27 million vehicles in the first six months. Volkswagen is catching up, selling 1.1 million in the same time.

Source: Bloomberg

The Sunshine, eh? Marketed to shiny happy people, I presume?

Yep.