GM Hits Million-Car Mark in China Ahead of Schedule

On April 21, when General MotorsGM +1.94% hands over keys on a small sports utility vehicle to a buyer in China, it will be the millionth car the company has sold so far here this year.

That’s the earliest in China it has reached the one million mark, GM said Monday.

Last year the automaker sold 3.16 million cars in the Middle Kingdom. But it lost market leadership after being top of the charts for eight years in annual sales to Volkswagen AGVOW3.XE -1.05%, which sold 3.27 million. One reason: GM was relatively slower than competitors to offer a full range of sports-utility vehicles  –  a fast growing and important segment in China.

Representing around 30% of its global car sales, China is a vital market for GM.

So far, it seems, a recent series of recalls which in the first quarter of this year cost around $1.3 billion—doesn’t seem to have had much of an impact on Chinese sales. GM executives in Detroit must be breathing a sigh of relief—for now.

In a statement Friday, GM in China said an ignition problem that surfaced earlier this year and affected cars mainly in North America with Chevrolet Cobalt, one of several compact cars equipped with faulty ignitions, wasn’t an issue in China because that model isn’t sold here.

The company also said that a recent recall of the Cadillac XTS — recalled because of a problem with brake booster-pump wiring that could lead to fires — doesn’t involve models on sale in the Chinese market because those sold and built here use a different component from the one used in North America. The Savana G Van, also affected by a recall, is not sold in China.

However, Shanghai GM – GM’s Chinese joint venture with SAIC Motor Corp. – announced late March it would recall 24,021 full-size crossover sports utility Buick Enclaves imported from the United States and produced between Aug. 2008 and Sept. 2012.

GM’s China operations are following the same procedures for recalls in the U.S.  – contacting customer and repairing vehicles, said GM China spokeswoman Dayna Hart.

Yet while numbers are small compared to the millions of cars implicated in the U.S., a protracted airing of GM’s dirty recall laundry in America could push even more Chinese consumers into the arms of GM’s rivals in China such as VW, as well as the increasingly aggressive Ford Motor Co., who has been clawing market share from rivals partially because of the popularity of its SUVs.

“It’s really too early for us to predict any reputational damage or impact on sales,” Ms. Hart said.