Things haven’t been going well for General Motors in China. We reported earlier this week that GM is taking more than $5 billion in charges from Chinese joint venture SAIC-GM. This is the latest in a series of bad news for General Motors in China, which has been losing money in its Chinese operations for three quarters in a row and is facing its seventh consecutive year of declining sales in the world’s largest car market.
The Chinese car market keeps growing, and GM’s market share there keeps contracting, largely because of increased domestic competition that’s often either state-owned or heavily subsidized.
A new Bloomberg report is something of an autopsy of what happened to GM’s sales, market share, and reputation in China. Bloomberg notes this week’s “massive revaluation” and says, “[GM CEO Mary] Barra is signaling that the automaker is dialing back its ambitions.”
Bloomberg doesn’t pull punches and describes GM’s business in China as a state of “free fall” and wonders whether General Motors will even stay in the Chinese market after the SAIC deal expires in 2027. For now, GM is committed to staying in the Chinese market, but barring a dramatic turnaround in the next few years, the Detroit automaker may soon need to reconsider that commitment. Alternatively, SAIC could be the one to let the deal expire without a renewal.
“We’ve seen a collapse of market share and profits all at once,” Mike Dunne, a former General Motors executive who consults on the Chinese market, told Bloomberg. “And the established carmakers are powerless to stop it.” However, one bright spot in The General’s Chinese operations is its minority ownership of the SAIC-GM-Wuling joint venture, which had an 11-percent boost in sales in China in Q3 2024. SGMW sells the Wuling and Baojun brands in China while exporting units to surrounding markets.
“China’s objective from the beginning was to do joint ventures with the big automakers and then get the technology and do it themselves,” Dunne continued, referring to the SAIC-GM partnership that began in the 1990s.
Even the Chinese dealers are open about the company’s struggles in China. “Chevrolet was pretty popular in 2017 and 2018,” Beijing Chevy sealer Sun Can told Bloomberg. “Now the market competition is intense, and it’s difficult to sell these cars.”
Barra told analysts recently that “we see a meaningful way we can participate” in the Chinese market. It will be “structurally different,” she added, “but we think there’s a place for our brands.” Barra was referring to the plan to move upmarket with Cadillac EVs and the Durant Guild, importing high-end models like the Chevy Corvette, GMC Hummer EV, and Cadillac Celestiq.
Comments
If China decides a play at Tawian by 2027 I can tell you GM will have nothing that will belong to them there to maintain the definition of the term “joint venture.” But keep your head under the sand hoping it will never happen.
Oh and as for them “feeling powerless”, yeah I have the tiniest violin playing for them and while they are all getting burned there, American, German, Japanese, etc., the smallest violin plays for GM.
Every smart investor with a brain could have told them to not put all their eggs in one basket. Especially a volatile unpredictable basket like China.
And now here they are, having to scramble to regain other baskets they ditched for the Chinese basket they now see has holes in it and there eggs are falling through them.
For sure and the really sad part is that we here in the US will be paying for this really bad management in one way or the other.
Mary in her infinite wisdom removed GM for Australia, NZ, Europe, South East Asia, and put all her faith in China, idiot but it’s not her business she has destroyed and will no doubt walk away wealthy and probably buy a BMW.
Surprised on the Australia move. They had great Aussie specific vehicles there.
all countries knew china just wanted to steel outside tech to produce their own. . took years but it has happened and the europians and americans have let china in.hope we get some great cars built and sold back here , caddies , buicks
The American auto industry never learned from Japan. This is just a repeat. It’s already gone. They just didn’t take the time to say Goodbye.
China’s standing in global markets is declining and will continue to decline unless China makes major changes, which I don’t see happening any time soon.
China will soon find that global trade is a two-way street, and Chinese products will not be welcomed in global markets given their predatory behavior.
The US wanted to help China “modernize” – we didn’t want a billion Chinese going hungry, a dangerous and destabilizing situation. China’s economy is at the point where that won’t happen, and I expect China will steadily become an economic backwater on the global stage – stable but no real economic growth. They will have only themselves to blame. China has always been an inward-looking society, and I expect that will be their future in coming decades. Oh well….
for sure, YEP
The stock broached $60 a few weeks ago for a day. First time in a long time. It’s back to $53.
The only good communists are in graves.
People doing business with the sawed off runts of the ccp are worse than scum.