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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).

Little-bit-bigger 2020 Buick Encore GX gets two three-cylinder engines

Ford broke the ice on selling three-cylinder engines in the U.S. with the 2014 Fiesta, then followed up with the EcoSport. Buick is about to widen that supermini-sized crack in the ice with the 2020 Encore GX. The semi-subcompact crossover will come in three trim levels that mix-and-match two turbocharged three-cylinder engines, two transmissions, and two drivetrains. The smaller engine is a 1.2-liter three-pot with 137 horsepower and 166 pound-feet of torque. This comes in one horse and 18 lb-ft of twist beyond the 1.4-liter four-cylinder in the smaller Encore. This engine will only be paired with a CVT and front-wheel drive in the Preferred, Select, and Essence trims. The meatier motor is a 1.3-liter three-cylinder with 155 hp and 174 lb-ft. That's down on the 163 hp and 177 lb-ft that the same engine produces in the Chinese-market version of the Encore GX. However, it gets buyers close to the 1.4-liter turbocharged four-cylinder that used to be optional on the smaller Encore, producing 153 hp and 177 lb-ft. This engine can be optioned on the front-wheel drive Select and Essence trims, where it would be mated to the CVT. The 1.3-liter three-cylinder is standard on all trims optioned with all-wheel drive, where it gets paired with GM's nine-speed automatic. GM does say the horsepower figures are estimates at the moment, so don't be surprised at any slight changes before deliveries begin next year. The Encore GX will serve buyers who would love it if the Encore had a bit more room but don't want to step up to the Envision. For a price GM hasn't announced yet, the Encore GX will reward those buyers with five more feet of cargo space, and some extra power for all those who decide to level up further. The junior Encore weighs just over 3,200 pounds, it's likely the Encore GX will shade that some. The Encore GX does ride on GM's new VSS-F platform, though, so the advanced architecture could provide an overall superior experience even with the lesser three-cylinder. GM has also said that the Encore GX will come standard with safety kit like forward collision alert and lane keep assist with a lane departure warning, features that are cost extras on the Encore. The Encore GX will also include automatic emergency braking, which can't be had on the Encore at any price.

GM won't really kill off the Chevy Volt and Cadillac CT6, will it?

General Motors is apparently considering killing off six slow-selling models by 2020, according to Reuters. But is that really likely? The news is mentioned in a story where UAW president Dennis Williams notes that slumping US car sales could threaten jobs at low-volume factories. Still, we're skeptical that GM is really serious about killing those cars. Reuters specifically calls out the Buick LaCrosse, Cadillac CT6, Cadillac XTS, Chevrolet Impala, Chevrolet Sonic, and the Chevrolet Volt. Most of these have been redesigned or refreshed within the past few model years. Four - the LaCrosse, Impala, CT6, and Volt - are built in the Hamtramck factory in Detroit. That plant has made only 35,000 cars this year - down 32 percent from 2016. A typical GM plant builds 200,000-300,000 vehicles a year. Of all the cars Williams listed, killing the XTS, Impala, and Sonic make the most sense. They're older and don't sell particularly well. On the other hand, axing the other three seems like an odd move. It would leave Buick and Cadillac without flagship sedans, at least until the rumored Cadillac CT8 arrives. The CT6 was a big investment for GM and backing out after just a few years would be a huge loss. It also uses GM's latest and best materials and technology, making us even more skeptical. The Volt is a hugely important car for Chevrolet, and supplementing it with a crossover makes more sense than replacing it with one. Offering one model with a range of powertrain variants like the Hyundai Ioniq and Toyota Prius might be another route GM could take. All six of these vehicles are sedans, Yes, crossover sales are booming, but there's still a huge market for cars. Backing away from these would be essentially giving up sales to competitors from around the globe. The UAW might simply be publicly pushing GM to move crossover production to Hamtramck to avoid closing the plant and laying off workers. Sales of passenger cars are down across both GM and the industry. Consolidating production in other plants and closing Hamtramck rather than having a single facility focus on sedans might make more sense from a business perspective. GM is also trying to reduce its unsold inventory, meaning current production may be slowed or halted while current cars move into customer hands. There's a lot of politics that goes into building a car. GM wants to do what makes the most sense from a business perspective, while the UAW doesn't workers to lose their jobs when a factory closes.