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Finance

General Motors loses US$5 billion in business in China

By Asia Tech Times
Last updated: 11/05/2025
5 Min Read
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Transitioning to electric vehicles has proven costly for U.S. automakers, even those with operations in China.

General Motors issued a warning to shareholders on Wednesday, signaling how painful and tricky the transition could become given geopolitical tensions and competition between the world’s two largest economies.

The U.S. automaker said it would record two non-cash charges totaling more than $5 billion on its China joint venture, one related to a restructuring of the business and another reflecting a decline in its value.

See also: Chinese industry body claims buying U.S. chips ‘unsafe’

General Motors expects restructuring costs of $260 to $2.9 billion and joint venture value reduction charges of $2.7 billion.

Shares of the U.S. automaker fell 2.7% in premarket trading.

GM partners with SAIC to produce Buick, Chevrolet and Cadillac vehicles in China.

The company’s board of directors believes the non-cash charge is necessary “in light of new business forecasts and the finalization of certain restructuring actions,” according to company filings.

GM has not disclosed details of the restructuring.

A company spokesman said most of the charges will be charged to the company’s fourth-quarter earnings, reducing net income but not adjusted results.

GM Chief Executive Mary Barra has been transforming GM’s operations in China as the former profit engine plunged into the red last year.

“Dealer inventories are significantly reduced”

Barra told investors in October that they would see improvements in that effort by the end of the year, saying “dealer inventories will be significantly reduced and sales and share will improve slightly.”

In the first three quarters of this year, the automaker lost about $350 million in the region.

In March, Reuters reported that SAIC plans thousands of layoffs, including at joint venture with General Motors.

Barra has previously warned that the Chinese market is becoming difficult for many companies to gain a foothold.

“It’s a difficult market right now. Frankly, it’s unsustainable because the number of loss-making companies out there can’t continue indefinitely.

Intense competition from domestic manufacturers and price wars have had a clear impact.

In the first 11 months of this year, SAIC General Motors’ sales dropped 59% to 370,989 vehicles, while local new energy vehicle champion BYD’s sales during the same period were more than 10 times.

The GM joint venture reached its peak in 2018, with annual sales reaching 2 million vehicles.

In 2022, Volkswagen’s title of best-selling brand in China will be taken away by BYD. Redouble efforts to deepen relationships with Chinese partners It includes electric vehicle technology from Xpeng Motors and SAIC Motor in response to weak sales in its largest market. The German automaker and SAIC recently agreed to extend their joint venture contract by ten years to 2040.

Japanese car manufacturer Nissan The company also laid off 9,000 employees and slashed production capacity as sales in China and the United States fell.

In Detroit, GM’s crosstown rival Ford Motor Co is transforming its operations in China into an auto export hub, even as some analysts urge Detroit’s automakers to cut their losses and exit the world’s largest auto market entirely.

  • Reuters Additional editing by Jim Pollard

See also:

Volkswagen says it will exit controversial Xinjiang factory

Survey finds Asian steelmakers failing to switch to renewable energy

EU may ask China for clean tech know-how in return for subsidies – FT

Ford CEO is driving a Xiaomi electric car and doesn’t want to give it up

Transition to electric vehicles will have profound impact on trade and jobs: IMF

EU supports high tariffs on Chinese electric cars, but negotiations will continue

Tavares: Tariffs on Chinese electric cars will accelerate EU factory closures

China’s SAIC Motor and joint ventures with General Motors and Volkswagen to lay off employees

Volkswagen says it “doesn’t want to give up” on China’s electric car market

Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He served as a senior editor at The Nation for more than 17 years.

Contents
See also: Chinese industry body claims buying U.S. chips ‘unsafe’“Dealer inventories are significantly reduced”See also:Volkswagen says it will exit controversial Xinjiang factorySurvey finds Asian steelmakers failing to switch to renewable energyEU may ask China for clean tech know-how in return for subsidies – FTFord CEO is driving a Xiaomi electric car and doesn’t want to give it upTransition to electric vehicles will have profound impact on trade and jobs: IMFEU supports high tariffs on Chinese electric cars, but negotiations will continueTavares: Tariffs on Chinese electric cars will accelerate EU factory closuresChina’s SAIC Motor and joint ventures with General Motors and Volkswagen to lay off employeesVolkswagen says it “doesn’t want to give up” on China’s electric car marketJim PollardLeave a Comment
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