Why General Motors’ Future In China Is Being Called Into Question
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General Motors and other foreign automakers may find it increasingly difficult to be successful in China as the automotive industry changes in coming years, experts believe.
As The Detroit News reports, investment bank Morgan & Stanley released a note this week cautioning investors that American automakers must work now to “preserve what remains in China,” of their business, or make the early decision to “avoid doubling down where they are unlikely to win.”
Foreign automakers in China, not just American ones, may face an uphill battle in the country in coming years as its domestic automakers expand their lineups and begin to capture more and more market share. Additionally, with connected cars quickly becoming commonplace, the transportation sector is beginning to pose a major privacy and security risk – which may eventually lead China to become wary of foreign brands’ products.
2019 Chevrolet Onix Sedan for China
Electric cars may be the biggest threat to American automakers’ success in China, though. China’s New Energy Vehicle Mandate, introduced in April of last year, hopes to see the country sell 4.6 million electric vehicles by 2020 and eventually ban internal combustion engine vehicles altogether. Some domestic automakers will also be selected to receive government subsidies to help speed up the transition from ICE cars to EVs.
American automakers cannot simply respond to the mandate by building more EVs, either. China is dominant in electric vehicle battery production and rare earth metal mining, and the US is only now setting up a dedicated supply chain for EV batteries in a bid to reduce China’s lead.
Buick Velite 6 PHEV and EV for China
Morgan Stanley’s report concluded that “many foreign auto firms, and in particular some U.S. firms, may be operating on borrowed time,” in China. GM, Ford, and FCA may eventually face a tough decision, then: exit the market early and avoid dumping money into a doomed endeavor, or double down and pray for success.
In the first quarter of 2019, GM’s sales in China dipped 18%, while Ford was down 36%, and FCA was down 41%, according to Detroit News data.
Subscribe to GM Authority for more electric car news and around-the-clock GM news coverage.
Source: The Detroit News
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Now does everyone understand why it is Crucial GM leads in the EV Segment?
They need China and and they obviously also need to hold onto the US Market Share. Sooooo many Chinese EV companies are right around the corner in the N.A. Market. GM is trying to hold onto their market.
are those chinese EV companies going to be required to partner with a domestic to sell in NA?
are they going to be required to transfer tech too?
if not we should lower the tariff boom on them. that would only be fair wouldn’t it?
This proves that the prevailing or conventional wisdom that Europe is death and China with its JVs is life has been nonsense.
GM should aquire or partner with PSA so to dominate in the Americas and Europe while continuing to use GM in China.
In the process GM would get Carlos Taveres, an amazing leader. People exaggerate the role of the French government.
Steve,
Carlos Traveres has, shut down factories, cut models, reduced R & D spending. GM doesn’t need another axe man at the helm.
GM still maintains a small footprint in Europe (29 dealerships; selling Cadillacs, Corvettes & Camaros)
Over the next few years: Vauxhall/Opel will switch to PSA platforms; the U.S. and Europe will hammer out some kind of trade deal; BREXIT will be complete. When the dust settles, GM will probably make a major push in Europe.
China’s MO is to learn as much about a company, further it by going into joint ventures and then in their final phase build clones of everything that the company builds independently without giving the company a share of the business or profits (AKA intellectual theft which is what Donald Trump has been arguing in trade negotiations with China).
I think i know why everybody is Concerned about increasing development w/EV’s; [ALL automobile’s on the planet are SUSCEPTIBLE to HACKER attack because of the ECU in every automobile produced]! That’s why i like automobile’s older than 1979! The small ignition module inside the distributor cap is what was used to deliver the spark! “w/the automakers driving towards EV’s: The oil company’s would possibly go broke”!
Doing business in China is the opposite of the wolf getting in the henhouse.
China is the wolf and it’s sucking in the chickens (us).
“with connected cars quickly becoming commonplace, the transportation sector is beginning to pose a major privacy and security risk – which may eventually lead China to become wary of foreign brands’ products.”
Is that what we should be concerned with or is it the other side of that page. We should be concerned with foreign cars on U.S. soil that could do the same.
“Since Huawei’s inception in 1987, the company continues to receive open support from senior Chinese Communist Party officials and People’s Liberation Army (PLA) Commanders,” the report stated.
“With over $100 billion in Chinese Government subsidization and direct financing, Huawei is able to offer unsuspecting U.S. businesses low-cost offers difficult to refuse in exchange for access to U.S. networks.”
https://www.newsweek.com/china-can-spy-us-citizens-through-their-huawei-smartphones-spy-chiefs-warn-806430
Whether there is any truth to the phone threat or not. The U.S. government should be working on counter measures to circumvent foreign electronics that could have any connected capabilities.
After all, the Chinese has stolen American automotive technology with their forced partnership and tech sharing. Giving them an inside look, along with the Chinese Governments subsidization of their auto industry, giving them control.
We can all assume that one day, all cars will have “OTA” capabilities.
Imagine your car, that connects to your phone, accessing your contacts and files and “phones them home”. Your car Installs malware onto your phone, that it download during an “OTA update” that act’s as soon as your phone connects to your work computer. Copying sensitive data to “phone home” once it reconnects to your car on the way home, with no trace on your employers network.
All this without the users awareness, or with it, as could be the case more so in America then anywhere else with the amount of immigration to this country, be it temporary or permanent.
FASTYLE: you produced a NUCLEAR bombshell of information; WAY TO GO!!! “DAMN”
It looks like GM choose bad cards but maybe some relevant groom save it. Hyundai, Toyota, PSA or some Chinese state conglomerate. Lost of Europe is now very hot problem. SUV and trucks is not relevant solution for long time and EV portfolio in 2022 is too late.
I remember a time when Chevrolet (GM in general) was a car of the American people. When it didn’t give a rat’s ass about china or Europe for that matter. True there was Holden in Australia and Africa, but it was largely focused on the American people. It would be nice to get back to that point in life. The “Pre-2005 to 2010” era. I don’t know what it was that happened but the whole world shifted around that time and everything since then has gotten off kilter in America and it’s about time that balance was restored.
I, for one, am opposed to all of this EV and autonomous nonsense. I’ve said it before we are setting ourselves up for a massive takeover from not only China, but India and Russia as well. China has been subtlety trying to take over America for ever and they’re doing it through technology. We were convinced to sell our communications to overseas companies and now india (neighbor of China) controls alot of our communications and tech along with china. We have already opened the doors to them and poor Donald Trump (as crazy as he is) is doing everything he can to push them out and bring security to our country again. We as America need to stop relying on china so much and start doing our own thing again. We have become fat and lazy and positioned to be slaughtered by our enemy. It is time that we as Americans wake up and really get back to work in fixing this country and supporting ourselves instead of supporting everything else. Our last two Democratic presidents have none nothing but weaken this nation in every way possible. A saxophone playing president who peter pipered us to giving away our communications and security and a charismatic pawn who painted our country in rainbow colored flags and kept middle eastern terrorists at our borders to distract us from the real enemies who already had their trojan horses behind our walls and are gaining strength every single moment by feeding off the info we send through the web. All while setting up the stand for his would be successor, a horribly lying, would be seductress (also the wife of the previously mentioned piper) to come in and finish the job her predecessors started. People got upset with trump for persecuting Harley so much for them wanting to move their business overseas, but no one really paid attention to why? Harley Davidson is an American Icon, much like Chevrolet. It was a bike of the American people. Trump wants Harley to stay an American Icon right here in America. The same thing we the people should be doing.
What we need to do is get involved with our car American Car companies, like Chevrolet, and stop putting so much emphasis on cars like Honda, Kia, Toyota, Hyundai, Nissan, Subaru, Benz, BMW, Audi and the likes there of. Even if we just focus on General Motors and say “Look GM, we, the working class American people are willing to work with you and for you if you are willing to work with us!” We need to tell GM to bring Buick back home to our shores, we need to tell them to bring back Pontiac and fix Chevrolet. Chevrolet needs to go back to being “The Heartbeat of America” Stop experimenting with all of these new cars and things and stick to what you know and what was working for you. Bring back cars like the Cavalier Z24 V6, the Chevy Berretta Z26, the Lumina Z34, the Eurosport VR, the Impala SS, the Caprice, the S10, the S10 Blazer, the K5 Blazer, the Tahoe Limited, the Cheyenne, the Scottsdale, the Silverado SS, the Monte Carlo SS, the Camaro RS, Camaro Z28, Camaro SS, the Pontiac Grand Prix, Bonneville, Trans Am, the GMC Jimmy, the Syclone, the Typhoon, the Grand National, the GNX, the Skylark, the Le sabre, the El Dorado, the Seville, the Deville, the Fleetwood Brougham, a better escalade, the Escalade EXT, etc. and Don’t half ass it. Give us a new high tech 5.7L 346ci pushrod V8 pushing 405hp and a 6.5L big cubic inch V8 high tech small block along with a revised 3800 series V6 pushing out 350hp Naturally aspirated with about 320tq and a rebooted 4.2L Vortec V6 pushing out 390hp and about 345tq. we could stand some better naturally aspirated 4-cylinders as well. Like that 2.7L I-4 with a non turbo setup pushing about 225hp or so would be just fine. Don’t get me wrong I have nothing against turbocharged or forced induction engines but Chevy, Pontiac, Buick and GMC were always simple cars and they still should be. The thing about it is, all of the cars that I mentioned would still have modern drive lines in them with 10-speed automatics or 9-speed FWD automatic but on better chassis. Simple designs mean simpler engineering and even though it will take development time, it would take less time to build on what we already have with tried and true equipment, than to try to keep engineering something new and keep going down this bad path. Where GM went wrong before was wasting money on brands like SATURN!!!!! Hummer and Daewoo ( for any of ya’ll old enough to remember Daewoo). Honestly Hummer didn’t need to be it’s own brand and could have been a GMC Model (all three hummers H1, H2 and H3) and GM would have been fine and had GM been smart, they would have folded pontiac into GMC as the car lineup of GMC and Pontiac could have survived. Also, if they hadn’t wasted their money on that Gosh Darn SATURN (i actually didn’t say gosh darn i meant the actually phrase that went there and i meant it with all of my being because i loathe the Saturn car company) GM would have had thousands of dollars to help it’s case. Olds didn’t have too many cars at that point so unfortunately i can understand why Olds died off but Pontiac should have lived on. We as Americans need to fight for GM and Harley. We need them to stand and live on. We need to stop buying the rest of the world’s stuff and buy our own stuff. We need to focus on our country, our brands our livelyhood because trust me. China is relentlessly trying to wipe us out and if we keep moving forward with this electric & autonomous crap. They will win and we will be no more.
looks like trump is right, china is eating our lunch and America is suffering, I hope china enjoys it, because they will be hurt by tariffs big time.
Finally: someone who has the right approach to our coming demise! The action’s & event’s between all other countries including America is already in world war by way of “OUR ELECTRONIC AVENUES”!! Van: hit the nail on the head when describing the automobiles that have been put to pasture!! Those automobiles he put forth possibly would bring back our revenue into THE CURRENT “GM” company & we would not need to ask the gov. for a bail-out!! Since our GM CEO is allowing Hennessey to develop our sport coupes & continuing to build Corvettes & etc.; the auto’s Van: quoted would possibly reinvent GM again!! (2 pull us out of another 2008 market problem)!!
thanks a lot of bus** and nobama for this.
no more bailouts to big corporations.
The question is now, how do we get GM to hit the brakes on this runaway train and become a company “For the American people, Built by the American people.” How do we convince them to give us back our cars? There are alot of us out here who know what we want from an American car company, the question we need to address is how do we get our voices heard? Who do we write to or talk to so we can get these issues resolved. If we just leave this stuff here we will only be complaining. I think we all owe it to ourselves and our children and future generations to do something to turn this around and get even a small piece of our country back. I think if we could, more people would see that we can make a difference and we can get our country back and we can Make America Great again. Bringing back the auto industry would bring back jobs, it would bring back an American work force, it would build morale, it would reduce crime because people would have jobs again, it would lower costs because we wouldn’t need to import as much because our cars would be built here. We have 3D printing and all kinds of other manufacturing processes, We could rebuild places like Detroit, Philadelphia, Chester, Etc. The same thing with Harley Davidson. I put alot of emphasis on these two because of how Iconic and American they are. Even though Ford is an American based company, Ford focuses too much on being a European car company and it has done so since the early 1970’s. Dodge & Chrysler (as American as they seem with their muscle cars) are owned by Fiat and have been owned by Mercedes Benz for so long it would be hard to return them to being an actual American car company. But I think General Motors could truly once again be the American car company for the American people and I will go ahead and say this now I think that GM and HD should have some types of Collaborations just like Ford and HD did back in the day with the F150 Harley Davidson. Honestly I’d rather see a Push rod performance/luxury variant Silverado Harley Davidson edition than a Ford F150. Along with a Colorado Harley Davidson and a Silverado HD Harley Davidson and maybe even a Camaro variant with the Black and Orange color scheme on the inside. It’s time us enthusiasts stood up and demanded our cars back. All of these share holders and everyone else who don’t give a darn about us, the working class american enthusiast and loyalist can make their say and we sit around and suffer and reminisce about the American cars we lost. We need to tell GM we want it all back but better and there is no reason these cars shouldn’t be here. We all have ideas about performance, fuel economy, design, comfort, tech, etc. Another thing to think about is if these cars go, other companies like Holley Performance, Flowmaster, Edelbrock, Lunati, Comp Cams, Summit Racing, Jegs, etc all go with it. If they go, the NHRA goes, drag strips disappear, car shows disappear, all of those fun summer nights, cruise nights, etc. They all go by the wayside and we are stuck with electric cars, working 40+hrs a week just to come home and do nothing but watch not-reality shows and get stuck like zombies with our faces glued to phones on un-social media. No more smelling race fuel and burnt rubber, no more street outlaws, nothing. When do we stop just letting our American stuff be taken away from us? Our cars, our clothes, our morals, our life, our liberty, our pursuits of happiness? We need Chevrolet, Pontiac, GMC, Buick, Cadillac & Harley Davidson to rule our roads again. Does anyone realize that’s five brands GM would have under one umbrella? (not counting Harley obviously) That’s five different branches of opportunities for GM to outsell Japanese cars like Honda, Toyota and Nissan or European cars like VW, Mercedes, BMW, Audi. This is just what I see. I would love for a GM official to call me or write to me and and ask me: “Hey there Mr. American Citizen, what would you like to see in an American car company built by Americans for Americans?” But since they won’t, I need to find out how to reach them.
The Chinese only wanted us there long enough to train them, or transfer our technology and knowledge to them. Thus the required partnerships with a Chinese carmaker in order to do business there. Now that GM and others have taught the Chinese everything they’ve learned from a century of building cars, we’re useless to them. The native carmakers can take over and unlike our free market where consumer preferences might’ve kept GM in good stead, their government can tip the scales in favor of Chinese brands now that they’ve been taught the business.