GM is aiming to restore its profitability in the Chinese market in 2025 after facing significant financial challenges last year. The automaker managed to return to profitability in the fourth quarter of 2024 following three consecutive quarters of losses. This positive shift was largely driven by cost-cutting measures, better sales performance, and efforts to enhance the competitiveness of its vehicle lineup.
Per a report from Automotive News China, which cites statements made by GM CFO Paul Jacobson, GM China sales surged 40 percent in Q4 compared to the preceding quarter. However, General Motors’ overall financial situation in the region remains challenging. The automaker incurred a $4 billion charge in the fourth quarter as a result of restructuring and impairment costs. General Motors also anticipates further restructuring charges between $2.6 billion and $2.9 billion as a result of diminished value in the company’s equity stake in SAIC-GM, a joint venture with SAIC Motor Corp, which manufactures Cadillac, Chevrolet, and Buick vehicles for the Chinese market.
To counteract declining profitability, General Motors’ restructuring strategy includes reduced inventory, plant closures, and vehicle lineup optimization. At its peak, General Motors’ Chinese business contributed up to $2 billion in annual profit, but analysts speculate that such levels may never return given evolving market conditions and a dramatic increase in competition.
The rapid rise of domestic automakers and the rapid shift toward electric vehicles has left General Motors struggling in China, with local brands like BYD gaining in popularity, all while new players like Xiaomi are aggressively entering the EV segment. An intense price war between Tesla and BYD has further pressured margins. General Motors’ annual sales in China have been in decline for the last eight years, falling from a peak of 4.04 million units sold in 2017 to just over 1.8 million units sold in 2024.
Despite these hurdles, GM remains committed to the Chinese market, with plans to expand its New Energy Vehicle (NEV) offerings with at least one new NEV per product line in 2025.
Comments
GM is profitable in EVs now. I’m sure they can return to profitability in China too. GM is on a roll.
You should quit doing LSD before commenting.
I don’t need LSD. One look at your butt-hurt response gets me so high. I’m set for days.
SAIC-GM spent a lot of money for reducing inventory. Its make the profit look like turn around soon, but It’s too early to be sure. SAIC GM can’t go back these good old days.
China used gm (and others) to steal intellectual property and learn to build autos, ICE and EV without further help. Days of profits on what’s left of joint ventures or stand alongs are “in the rear view window”