General Motors Faces $5B Loss as Sales Drop in China
General Motors announced a $5 billion loss tied to its struggling Chinese joint ventures. Sales in the region dropped nearly 20% this year, reducing GM’s market share in China from over 15% in 2015 to 6.8% today. The ventures, once profitable, have been hit by competition from Chinese automakers focusing on electric and hybrid vehicles.
The financial impact includes a $2.6 to $2.9 billion write-down on its stake in Chinese ventures and $2.7 billion in restructuring charges, mostly in the fourth quarter. Despite these setbacks, GM expects to post a net profit of $10.4 to $11.1 billion for the year, driven by strong performance in North America.
China’s market has become challenging for foreign automakers. Domestic brands like BYD are producing higher-quality vehicles at lower costs, often supported by government subsidies. CEO Mary Barra emphasized a shift in strategy, with GM focusing on premium imports and new pickups to stay competitive.
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