General Motors announced to its shareholders on Wednesday that the company’s struggling Chinese business would result in the production of fewer models and the closure of manufacturing facilities, and that it would record more than$ 5 billion in two non-cash charges in the fourth quarter.
GM will reduce its joint-venture value with China’s state-owned SAIC Motor by$ 2.6 billion to$ 2.9 billion, and the automaker estimates restructuring costs will be$ 2.7 billion. The Detroit-based manufacturer companions with SAIC to create Buick, Cadillac, and Chevrolet cars.
General Motors Chairman and CEO Mary Barra speaks about the economic view of the manufacturer on Tuesday, Jan. 10, 2017, in Detroit, Michigan. ( AP Photo/Paul Sancya )
In the first three quarters of this year, GM lost roughly$ 350 million throughout the place, and SAIC planned to eliminate thousands of jobs, including those in its joint venture with GM, in March.
By the end of the year, GM CEO Mary Barra announced” a substantial decrease in dealer inventory and humble enhancements in sales and shares” in October.
Barra noted that the working environment in China is still hard and that there is still work to be done by our partner.
Due to the rise in demand for more electric cars and plug-in hybrid vehicles, Taiwanese manufacturers like BYD have surpassed those like GM and Volkswagen. While GM-SAIC sold just 370, 989 products in the first 11 months of 2024, a sales decrease of 59 %, BYD sold more than 10 times the number of cars in the same time.
GM’s shares were down 2.7 % after its announcement on Wednesday, but prior to President-elect Donald Trump‘s Mexico–Canada tariff announcement in November, GM’s shares were up 49 %.
GM’s stocks fell 7 % on Nov. 26 after Trump posted his tax charter, as the proposed taxes threaten GM’s five Mexico-based manufacturing plants.
As BYD moves generation into Mexico to import products into the U.S., China’s increased achievement serves as a warning signal for automakers and politicians alike. BYD made the first move in bringing its manufacturing into Latin America last year by purchasing an abandoned Ford Motor factory in Brazil.
In November, BYD said it was considering building a production plant in Mexico, according to the Wall Street Journal. In Mexico, about 10 % of new cars are Chinese businesses, making it a perfect place to set up shop and trade to the U.S.
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GM hopes to maintain its SAIC collaboration to revive revenue in the nation and regain its position as a leader in China’s auto industry despite China’s car supremacy.
During Wednesday’s investor gathering, GM Chief Financial Officer Paul Jacobson stated that the company will work toward recovering its success in China over the course of 2025.
