Geely and GM venture both wade into China’s pickup truck competition
Zhejiang Geely Holding Group as well as General Motors Co’s (GM.N) Chinese venture are planning to launch their first pickup truck models, intensifying competition in a segment dominated by Great Wall Motor (601633.SS).
Geely showed off its first pickup truck model last week at a company event publicised on social media, while official documents showed a joint venture of carmakers including GM seeking approval to build its first pickup truck model.
The companies are trying to tap into the niche market, which still accounts for less than 2% of overall vehicle sales in China, but that has outperformed as local governments ease restrictions on their entry into urban areas.
China sold around 251,000 pickup trucks in the first seven months of 2020, according to the China Association of Automobile Manufacturers (CAAM). That represented a 1.4% fall from the same period last year, but was more modest than the 12.7% slump in overall vehicle sales over that period.
Documents on the website of China’s Ministry of Industry and Information Technology showed a joint venture between GM, state-owned SAIC Motor (600104.SS) and Guangxi Automobile Group seeking government approval to build its first pickup truck model Zhengtu.
Meanwhile, Geely is building a vehicle plant which will have an annual manufacturing capacity of 100,000 vehicles, including pickup trucks, in China’s eastern city of Zibo, construction bidding documents on the company website showed.
Geely and GM representatives declined any further comment.
The plans come as pickup trucks sales are gathering pace compared to some of its peers.
Great Wall Motor, China’s largest pickup manufacturer, saw pickup sales surge 38% in the first seven months of 2020 versus last year due to its new P-series models.
By comparison, the sales of sport-utility vehicles and of sedans fell 11% and 22% respectively over that period.
But Cui Dongshu, secretary general at China Passenger Car Association (CPCA), does not expect any significant jump in sales over the long term even if government curbs ease further.
“There is still a lack of demand for pickup trucks from normal Chinese customers,” he said. “They are more familiar with SUVs and sedans.”