AUTO

How much profit is General Motors Corporation selling each car Wuling Hongguang Mini EV

Although selling very well, even surpassing Tesla Model 3 in China, Wuling Hongguang Mini EV did not bring much profit for GM group.

China is currently the largest car market in the world and every car company wants to succeed in this billion-people country. General Motors Corporation (GM) of the United States is no exception.

In the second quarter of this year, GM Group has achieved amazing business results in the Chinese market. Accordingly, through its joint ventures, GM Group sold a total of 750,000 cars to Chinese customers in the period from April to June 2021, up 5.2% over the same period last year.

The driving force behind GM’s growth in the Chinese market is the high-end models, mid-size and large SUVs and MPVs of its sub-brands. In addition, the demand for GM’s electric cars has also increased sharply in China in the past 3 months.

In particular, Wuling models accounted for 28% of GM’s total sales in the Chinese market in the second quarter of this year. In total, 346,000 Wuling cars were sold to Chinese customers. This was originally a sub-brand established by a joint venture between GM, SAIC and Wuling Motors.

The Wuling Hongguang Mini EV electric car model alone has achieved record sales of more than 85,000 units. This is a super cheap car, just launched in the Chinese market in July 2020 but has quickly “sold like hot cakes”. As of January 2021, this electric car model has achieved sales of about 160,000 units in the Chinese market. GM also estimates it will sell more than 400,000 Wuling Hongguang Mini EVs to Chinese customers this year.

Despite selling well, the Wuling Hongguang Mini EV did not bring much profit for the GM group. Even, each of these electric cars sold, GM Group only made a profit of 89 yuan.
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In fact, GM corporation also does not sell Wuling Hongguang Mini EV to make a profit. Instead, this electric car model plays another important role, which is to bring in carbon credits for the American car corporation. Each of these cars sold is equivalent to 2 carbon credits. In China, 1 carbon credit is worth 3,000 RMB. In other words, compared to selling cars, the Wuling brand will make more money on carbon credits.
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According to calculations, if 560,000 units of Hongguang Mini EV are sold in 2020 and 2021, the Wuling brand only makes a profit of $7.8 million. However, these 560,000 electric vehicles are equivalent to carbon credits worth up to $ 259.8 million.

In addition, Hongguang Mini EV also brings another benefit to Wuling, which is brand recognition in both domestic and foreign markets. Thanks to this electric car model costing only 29,800 – 38,800 yuan, Wuling has become a famous global brand. The reason Wuling Hongguang Mini EV is so interested in foreign media is because it has beaten Tesla Model 3 more than once in terms of sales. Even customers in Japan also expect this model to be distributed in the country of cherry blossoms.

In addition to Wuling, GM Group also has Baojun brand in the Chinese market. In the second quarter of this year, Baojun brought in sales of about 52,000 vehicles, of which more than 8,000 were electric cars. Baojun’s sales are expected to continue to grow when recently, the brand unveiled a new station wagon model called Valli with a design aimed at young people in China.

Next is the Buick sub-brand, which turned out to be very popular in the Chinese market in the second quarter of this year. Buick’s sales have increased by 5.7% to more than 225,000 units in China in the past three months. Of which, there are 45,000 MPV GL8 units, accounting for about 40% of Buick’s total sales. Two SUV models Buick LaCrosse as well as Enclave have sales of 16,000 units and 8,000 units, respectively.

Similar to Buick, GM’s Cadillac brand also grew in the Chinese market in the second quarter of this year. Specifically, Cadillac sales increased 9.1% to nearly 64,000 units. That success is thanks to the luxury SUV XT6 (10,000 units) and the CT5 sedan (16,000 units).

Finally, the Chevrolet brand with sales of more than 63,000 units. Particularly, the 4-door model Chevrolet Malibu XL brought in more than 16,000 customers, an increase of 36%. In addition, the demand to buy two SUV models Chevrolet Equinox and Blazer in China also increased.

In the near future, GM will expand its product portfolio in China with the Cadillac Lyriq luxury electric SUV. It is expected that the Cadillac Lyriq will be officially on sale in this billion-people market early next year.

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