GM China Losing Market Share, And It’s Not Just Because Of COVID-19
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GM China is losing market share, with a significant decline recorded over the last several years. The decline is tied to a variety of different factors, and is believed to be the result of more than just the COVID-19 pandemic.
Per a recent report from CNBC, GM China’s market share has fallen from 14.9 percent in 2015 to 9.8 percent in 2022. China has been GM’s top sales market for over a decade, and has served as one of two main profit engines for the automaker.
The 2022 calendar year marked the first time since 2004 that GM’s market share in China fell below the 10-percent mark. Earnings have dropped nearly 70 percent since a peak in 2014.
Myriad factors are to blame for the decline, including the COVID-19 pandemic. GM China’s equity income fell from $2 billion in 2018 to $1.1 billion in 2019 and $512 million in 2020, rising to $1.1 billion in 2021 and dipping again to $677 million in 2022. However, as CNBC points out, GM China’s business woes began years before the COVID-19 outbreak.
Other factors include a rise in economic and political tensions between the U.S. and China, as well as a strong shift towards nationalism among Chinese consumers, in particular with regard to the automotive industry and the broader movement to EVs. As the auto industry makes strides towards the mass-adoption of electric vehicles, Chinese consumers in turn appear to be moving towards Chinese automakers, such as BYD. Increased competition is also to blame, with government-backed domestic automakers and foreign automakers alike all vying to grab a slice of the market.
BYD is current the fourth-ranked automaker by market share in China’s light-vehicle segment. Volkswagen Group is first, while GM China is second, with Toyota Group ranked third. GM China sales dipped 20 percent during the 2022 calendar year, with a 22-percent drop during Q4 of 2022. Notably, GM sold far more Cadillacs in China than it did in the U.S. during the 2022 calendar year.
Meanwhile, GM CEO Mary Barra recently indicated that China remains an important part of the automaker’s business, despite potential geopolitical complications like the now-defunct “zero Covid” policy and subsequent protests. During an Automotive Press Association meeting, Barra stated that GM “continue[s] to see opportunity [in China] and we’ll continue to evaluate the situation, but out plans are to be in a leadership position in EVs.”
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Did GM really believe that China had any other intention of using them to steal their technology and then drive them out?
Investing in China is foolish. GM vehicles are no longer competitive there as China’s technology theft increases its manufacturing level, and Chinese patriotism also plays a role in not looking good at U.S. company GM. GM should stop spending money on communists and invest more in GM operations in the United States, Brazil, and Korea.
You’d think GM would know about this and prepare. There will come a time when they will be forced out or their investments significantly reduced by the CCP as Red Chinese patriotic propaganda takes hold. GM will learn the hard way and I cant wait!
They get what they deserve, wake up American companies, you to NBA. Quit salivating over the billions of people they have as a money target its wishful thinking at best. Unless you do want to tank the US which i am believing is truer each day. Guess maybe you thought cozying up to Communist China would help you score some of those rare earth metals it takes to push the ev scam. Or does simply being in China make you feel less responsible for all the child slaves used to mine said rare earth metals.
So China is now Cadillac’s biggest market, more so than the U.S.
Yeah….. for XT5’s. Doesn’t help that GMC has largly pushed out Cadillac stateside.
You know what they say about sleeping with dogs…that must apply here in some manner.
We’re going to need to pull out of China eventually…and stop doing business altogether…all companies should start planning for that, if they haven’t.
Mary’s doing the same for China as she’s done for the U.S. Will she still get her bonuses?
GM as not been an American for quite some time now. Of course, GM will be crawling back to America begging forgiveness.
Taxpayers bailed them out and the rewards went overseas.
Cut the “bail out” crap! I’m critical of the way GM is run for good reason, but the government loans were all paid back with interest. If you want to criticize, make sure you have your facts straight.
ACZ, Yes, correct the loans were paid back but still, the rewards that followed the loans went overseas or down Mexico way.
PRNewswire/ — General Motors Co. (NYSE: GM) today reported fourth-quarter 2022 revenue of $43.1 billion, net income attributable to stockholders of $2.0 billion and EBIT-adjusted of $3.8 billion.
GM’s full-year 2022 revenue was $156.7 billion, net income attributable to stockholders was $9.9 billion and EBIT-adjusted was a record $14.5 billion. Results were at the high-end of the company’s revised EBIT-adjusted guidance range.
China’s citizens are now showing hometown loyalty given the strained relations with the USA post Covid. At this time Xi and Putin see their opening and opportunity moves to eat the west’s lunch and enhance their power and position. With Chinese citizen automobile brand national loyalty now changing, it’s kinda like owning a foreign made motor vehicle in Michigan during the era between the 50’s and 90’s. Or wanting to install solar fields and windmills in Kentucky today. BTW: The Chinese are really coming along strong in underground coal mining equipment. They are hell bent on coal. Also the Chinese and Putin see weakness in the west’s anti fossil fuel moves and are taking this window of opportunity to enhance their strengths. The Chinese have also learned and gained from American multinational corporations like GM and Caterpillar setting up manufacturing operations in China. In fact the Chinese make all of Caterpillar’s undercarriages through Caterpillar’s Asiatrak unit. It’s a game changing world and it’s now East versus West. With the East making their power move.
No, Mr Murray, the chinese companies simply have learned to produce competitive automobiles instead of crap, thats why they sell so well.
The majority of automobiles sold on the Chinese market are under foreign brands
Barra was an idiot for making US & China GM’s only real profit centers. Anyone could see this turn a decade ago. Stellantis is smart enough to stop burning money in PRC.
GM needs to ride this out and, while doing so, start selling EVs in Europe. GM also needs a secondary design center other the China, Russelheim isn’t being used by PSA, and once housed 18 centers of compliance.
GM cannot survive off the Anericas only unless they wish to be in Ford’s position.
Two correcting remarks:
1st: The Stellantis-Brands have never done very well in China, GM has taken all the market
2nd: Rüsselsheim is not being used by PSA, since PSA does no longer exist.
Rüsselsheim, meaning the Opel factory, technical and design centers are being used by Stellantis
3rd: Ford has given up on Brasil, closed all facilities there
Bravo for Ford. Wish GM would do the same in china.
Giving up on the world’s largest market means giving one’s own existence.
As an Americas only dwarf, GM would not be able to survive.
Ford o.t.o.h has a perspecitive of a ever closer collaboration with the VW group.
As long as US corporations continue to blind themselves to the reality of trying to do business with Communist China, they are playing with fire and they’re going to get burned.
As others here have noted, GM is foolish to have made the Chinese market such an important source of income, given the ruling Communists’ penchant for stealing competitors’ intellectual property and unfairly rigging the system against them. Simply put, China has lied and cheated its way through international trade, international sport, and even through international public health, as we saw with the act of biological warfare that was COVID-19. How could GM and other American automakers have expected to be treated any better? They are now reaping the whirlwind.
Maybe GM’s current travails in China will convince Mary Barra and her crew that the company will do better by making itself more competitive in North America and Europe. And in the long run, that can only be better for all concerned.
Envision, made in China. It should have a CCP red emblem on it instead of that new red, white, and blue Buick emblem.
…and is top rated SUV in the segment too!
Right you are !
Who didnt see this coming? The red dragon will gobble up GM’s China investments sooner or later. They better have contingency plans to deal with this upcoming scenario.
What a mass of hilarious jingoistic crap in the comments!
GM is market leader in China, before VW Group and Toyota, followed on fourth place by BYD (which is BTW with Tesla No 1 in producing and selling Electric Vehicles).
As was to be expected, the native Chinese manufacturers learn to build automobiles which are competitive to the ones made by the Joint-Venture companies with foreign automakers like VW Group, GM, Toyota and others. This is all natural.
Remember that the USA excluded China from collaborating on the ISS (International Space Station) and now China has a space station on herself alone. What a success for Washington!
You want GM to dwarf itself by withdrawing from the worlds largest automobile market, China, which happens also to be GM’s largest market?
That would make GM into a target to be saved by being taken over by Honda.
An America-only company cannot have the clout to keep her technical standard, it would dwindle and drop deaper into oblivion. Grow, or vanish, thats the harsh reality of capitalism.
To whom you think, should GM sell her Chinese investments? To Honda or to Chinese companies? Or just give them?
You some kind of activist? It’s not GM that will pull itself from China, it’s the CCP who will drastically reduce or expropriate GM’s investments as well as their proprietary technologies as tensions rise in the Far East and Pacific region. We don’t care about GM’s involvement in China market, it’s the CCP’s global ambitions and GM’s vulnerability to the whims of the CCP we care about. The Chinese car buying populace are already beginning to overwhelmingly support their domestic manufacturers as a response to the CCP’s nationalistic propaganda. This is way way bigger than mere vehicle manufacturers, millions of lives are at stake.
I agree with you. For big purchases like automobile, no one would vote out of nationalistic enthusiasm. People always vote with their wallet. If you go on youtube and watch some expats’ car reviews on newer Chinese offerings you’ll understand why foreign brands are having a hard time in China. (whisper: It’s the interior!)
(Whispering back like Brandon)
Probably because the CCP has strict requirements to keep their darling manufacturers ahead.
GM will just ‘give’ in the end.
I would be willing to bet that if we go to war with China as it appears, Gm and other American companies will continue on doing business with China while they are killing Americans and destroying our way of life. Heck i bet China makes them manufacture weapons for the war.