General Motors (GM) is one of the first foreign brands to penetrate the Chinese market and is still enjoying a large share.
Last month, they reported a 16.9 percent increase in sales. They sold a total of 295,282 units since May last year. GM attributes their sales to their lower end cars than the luxury units.
Matt Tsien, GM's China chief, said: "When you go into tier-three and -four cities, we saw double-digit growth for the whole of last year. It's still growing at double-digits this year and will continue."
There was "negative growth" in some bigger cities, according to Tsien. He was particularly referring to the Baojun brand which was launched in 2011. The Baojun line has smaller units and targeted to cater drivers from the rural areas.
GM predicts that they will be able to sell more than 600,000 vehicles this year. The car manufacturing giant will also expand to more parts of China.
Tsien admitted that the creation of the Baojun line was due to the merging of GM, SAIC, and Guaxi Automobile Group (SGMW). Guaxi was formerly Wuling Auto.
"In the 2000s, all the action was in tier-one and tier-two cities like Beijing and Shanghai where growth was mostly double-digit," Tsien said. "But because of SGMW, we had a window into tier-three, -four and -five cities. That helped convince us Baojun was a genuine play."
There are six models under the Baojun line of vehicles. The brand includes a multipurpose minivan selling for 61,000 yuan and a sport-utility vehicle selling at 78,000 yuan.
SGMW executive vice president Gustavo Cespedes said that sales of the Baojun is making the company self-sustaining.
He said, "We have aggressive growth plans (and) can fund our own growth, while providing good returns for all the shareholders."