GM Struggles to Navigate Red Ink in China
Mary Barra, GM chairman and CEO, says the automaker is not leaving China, but it is preparing to restructure its operations around Buick, which remains popular in the country, and the Wuling and Baojun joint ventures.
July 30, 2024
With losses piling up, General Motors is preparing to slim down its once-promising investment in China.
GM says it lost $104 million in China during the second quarter of 2024. The new shortfall follows a loss of $106 million in the first quarter and steadily diminishing profits during 2023 as the Chinese market moved to EVs and local brands, which have grown in power and prominence.
Mary Barra, GM chairman and CEO, says the automaker is not leaving China, but it is preparing to restructure its operations around Buick, which remains popular in the country, and the Wuling and Baojun brands, which were created with GM’s Chinese partners in 2010 to appeal to customers in the middle and lower end of the market.
“I think when we look at the strength of the Buick brand and the China brands, there’s a path forward in this market that we do believe over the course of the midterm is going to resume…growth. So that is our plan, and I’m not going to predict where we’re going to be exactly,” Barra says during a conference call with analysts.
“I will just tell you, we’re working aggressively to improve that situation and leverage what we have in (GM-Wuling),” she adds.
However, GM is bracing for more losses and preparing for a major restructuring of its operations in China.
“We had expected to return to profitability in China in the second quarter,” Barra acknowledges. “However, we reported a loss, and we expect the rest of the year will remain challenging, because the headwinds are not easy.