General Motors (G.M.) announced that it will take a significant hit of over $5 billion to its profit due to the restructuring of its struggling operations in China. The company, which operates a 50-50 joint venture with SAIC Motor, has been losing money as car sales in China have dropped sharply.
G.M.’s Chinese joint venture, SAIC-GM, was once successful but has lost market share to local manufacturers that invested heavily in electric and hybrid cars. The business now generates considerable losses, with G.M. reporting a $347 million loss on its Chinese operations in the first nine months of the year.
The company expects an expense of $2.6 billion to $2.9 billion in the fourth quarter due to the reduction in the value of its investment in the joint venture and another $2.7 billion expense related to restructuring measures. G.M.’s market share has dropped to 6.8 percent, from 8.6 percent a year earlier and more than 15 percent in 2015.
Despite this, G.M. remains focused on capital efficiency and cost discipline, working with its partner SGM to turn around the business. The company expects to show year-over-year improvement in China by 2025.
Source: https://www.nytimes.com/2024/12/04/business/general-motors-china-electric-vehicles.html