According to foreign media reports, General Motors will generate two more than 5 billion US dollars of costs and assets due to its Chinese business, one of which is related to business reorganization, and the other reflects the decline in the value of joint ventures.
On December 4, GM said in a securities filing document that it is expected that the value of its joint venture in China will be reduced by $ 2.9 billion, and the cost of another $ 2.7 billion will be expected to close the factory and reorganize it. Business in China.
Another document shows that before the announcement of the value of the value, as of the end of 2023, General Motor’s valuation of its joint venture with SAIC Group’s joint venture was $ 6.4 billion. The down reduction of joint venture valuations shows that GM’s business in China is no longer as profitable as before.
The cost of US $ 2.7 billion is related to the plan of a reorganized joint venture. It is reported that General Motor will close some models that are not profitable in the Chinese factory and reduce non -profit models. According to the documents submitted by General Motors, most of the expenses will be included in the company’s fourth quarter financial report. It is expected to affect net profit, but it will not affect the adjustment of GM’s adjustment.
GM’s joint venture in China was the profit engine of this Detroit company. It made an annual profit of more than $ 2 billion in China in 2014-2018. However, in recent years, due to the booming development of Chinese car manufacturers, foreign automakers’ share in the Chinese market has gradually devoured. GM’s market share (including its joint venture) in China also plummeted from about 15%in 2015 to 8.6%last year.
In the past six years, some auto manufacturers in the United States, Japan, South Korea and Europe have closed or sold Chinese factories, or withdraw from joint venture. GM has failed to be spared to this pressure. The company’s chief executive, Mary Boala, said in July that for many companies that are losing money, the Chinese market is becoming difficult to maintain. In the first nine months of this year, the company lost $ 347 million in China. In the first 11 months of this year, SAIC -GM car sales fell 59%year -on -year to 370,989 units. In contrast, BYD’s sales in the same period were more than 10 times that of SAIC -GM.
Nevertheless, General Motor spokesman said that although GM has encountered difficulties in China, GM and SAIC Group believe that joint ventures can resume profitability. In addition, GM estimates that its business in China will continue to advance forward without GM’s additional capital investment.
“As we have always said, we focus on capital efficiency and cost discipline, and have always cooperated with SAIC -GM, and are committed to reversing China’s business situation and enable it to achieve sustainable development and profitability in the market. The plan is expected to achieve a year -on -year improvement in China’s performance in 2025.