A Slow Down In Sales Looming For General Motors Company (NYSE:GM) In China


Dallas, Texas 07/21/2015 (Financialstrend) – General Motors Company (NYSE:GM) and other automakers are feeling the full brunt of the economic slowdown in China as sales continue to wane.  Shares of the giant automaker are down by 12% for the year as the purchasing power of people in the country comes under pressure. The volatility in China’s stock market has kept many buyers away from car dealers.

 Uncertainty over China Prospects

 Barclays has already released a bearish note with regards to auto stocks most of which rely on China for a good chunk of their sales. General Motors had a record first quarter of sales that was up by 4.4%. However, a cloud of uncertainty is slowly filling the air on whether a possible crash may be looming for GM in one of its most important markets

 Ford, which has posted huge growth in China over the past few years, is already crying foul of a change in fortunes having registered a 0.1% growth in the first half of the year. Sluggish growth continues to be the order of the day for most of the US auto companies in China as Japanese models continue to perform much better.

Share Price Target Cut

 Auto sales for the month of June tumbled by 2.3% year-over-year just an indication that General Motors Company (NYSE:GM) may be in for a surprise slowdown in terms of car sales. Barclays has already cut its share price target for the stock to $36 a share from $44 out of concern that the automaker may struggle to hit its sales target.

With sentiments in China remaining low, analysts believe General Motors Company (NYSE:GM) may lack catalysts to propel the stock higher in the market. China is also expected to pose a greater risk to GM as inventory levels continue to outpace sales growth. The automaker has already said that its Opel division in Europe will reduce output in two of its factories just an indication of a rocky path ahead.

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