You are here:-, US, World-Chevrolet starts sale of Pickup Trucks in China

Chevrolet starts sale of Pickup Trucks in China

Chevrolet will start selling the Colorado and Silverado pickup trucks in China in the first half of the next year. This was announced earlier this year on the 2016 Guangzhou Auto Show in southern China.

General Motors kept these trucks in silent for a simple reason; Car producer wanted Chinese government to look at them as environmentally friendly and responsible company that does not sale the trucks didn’t fit that image. Other producers, Ford for example, are planning to make the same move, towards the official sale, even though until now sales was organized only in the grey zone.

Race with the time is already ongoing because the American producers needs to step in on official market before elected president make any move. The sales in China was organized earlier, though. Automaker refused to sell, no matter on demand from the market in China. The buyers went directly to dealers in the U.S. cutting the whole part of the official distribution chain. In that way all participants earned have made a lot of earnings, so GM and Ford didn’t want to lose big income money.

Is it late for GM and Ford in China?

The situation after the elections in U.S. is still unclear, because the president elected Donald Trump started to soften his tone. Yet, it is not sure what will happened with his promise during the pre-election campaign that he will declare China a “currency manipulator”, which consequently means that 45% import tariff on Chinese goods will be taken into the action.

At this moment official statements from the both sides after first meeting are reasonable. Nevertheless, China will follow the situation and react accordingly. Global Times close to the government, already wrote about it, in the article, titled “Will Trump start a trade war against China?” Unsigned author wrote:  “If Trump imposes a 45 percent tariff on Chinese imports, China-U.S. trade will be paralyzed. China will take a tit-for-tat approach then. A batch of Boeing orders will be replaced by Airbus. U.S. auto and iPhone sales in China will suffer a setback, and U.S. soybean and maize imports will be halted. China can also limit the number of Chinese students studying in the U.S.”

Strong action will affect the new pickup trucks market A lot. In China there are American cars produced locally and those imported from the United States. Locally produced are cars made by the “Shanghai-GM” and “Changan-Ford” joint ventures that are 50% in Chinese ownership. It is not likely that government will directly hit those, because of thousands of Chinese workers, directly engaged and through out of supply and distribution networks.

More possible scenario is that target will be the import. China could retaliate with a 45% tariff on made-in-America cars. That wouldn’t hurt Chevrolet very much. Only one car out of the ten they sell is an import. But it would also kill any chance to make the new pickup trucks a success; they would become far too expensive.

Chevrolet staff in Guangzhou told to Tycho de Feijter from Forbs that “they will go forward with their plans for now, at least until more becomes clear about the trade policies of the new administration.”

About the Author: