Shanghai GM sees success with price cut as Chevy Malibu sales exceed 6400 units in August

Gasgoo.com (Shanghai September 8) - Shanghai GM's decision to reduce prices of the Malibu is bringing in strong results, with the joint venture announcing that it sold 6,443 units last month, according to a Caijing report appearing today. The figure represents a new monthly sales high for the midsize, and marks the first time it has met its previously announced monthly sales target of 6,000 units. However, there are concerns that the decreased price may negatively affect Shanghai GM's profits.

Ever since its debut, monthly sales of the Malibu have wavered around the 1,700 unit mark. Despite garnering praise across the media, sales failed to meet the joint venture's monthly target of 6,000 units. Several analysts have remarked that falling sales of the Buick Regal and Lacrosse have amplified GM's desire for a strong selling midsize in the country.

In order to combat the situation, Shanghai GM announced in late July that the price of the Malibu will be reduced by 20,000 yuan to 25,000 yuan ($3,132-$3,915) across its 500 dealership chain. The swiftness with which Shanghai GM announced the price change is evidence of how important a part the Malibu plays in the JV's Chinese business strategy.

However, there are concerns that Shanghai GM's decisions to cut prices may reduce it overall profits. A recent analysis report from Haitong International Securities predicts that the JV's third quarter profits will take a hit due to pricing policy change.

Shanghai GM sold a total of 118,051 vehicles last month, 15 percent more than it sold last August. The JV has fallen behind FAW-VW in terms of passenger automobile sales, with China Passenger Car Association statistics revealing that its sales in the segment totaled 104,000 vehicles in July, compared to FAW-VW's 116,000 vehicles.