Devaluation Of Chinese Yuan To Have ‘Limited Exposure’ On General Motors’ Business
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Since July 18th, 2015, the Chinese Yuan currency has depreciated roughly four percent in relation to the U.S. Dollar, causing somewhat of a scare by various international companies, organizations, and investors alike.
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Luckily, General Motors sees the devaluation of the Yuan as impacting its business in a limited way, with the automaker issuing the following statement about the subject:
General Motors’ primary approach to managing foreign exchange risk has been to employ a natural hedge by building vehicles for sale in each of our major markets. In China, we believe that this approach, along with a well-established local supply chain, mitigates a majority of the risk associated with the devaluation of the Yuan. We believe that our exposure is limited and manageable, and do not expect that the devaluation will have a material impact on the company’s financial performance. We continue to expect strong results in China that will be sustained through the remainder of the year.
The limited impact of the Yuan’s devaluation on General Motors’ business is welcome news to the automaker, its investors and stakeholders given the importance of the Chinese market to the automaker’s earnings and global scale.
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