<img src='https://news.cgtn.com/news/2024-08-09/GM-reaffirms-commitment-to-China-operations-amid-rising-competition-1vVNyxE8vqo/img/07fb7be245184829ae0dceb22041b006/07fb7be245184829ae0dceb22041b006.png' alt='General Motors Co. signage is displayed inside the Renaissance Center, the company's world headquarters complex in Detroit, Michigan, U.S. /CFP'
General Motors (GM) reaffirmed its commitment on Thursday to building a profitable and self-sustaining operation in China, despite facing significant competition from local brands.
The announcement, made by GM CFO Paul Jacobson at a J.P. Morgan auto conference, came as the company’s shares rose by over 4 percent.
Jacobson emphasized the goal of maintaining financial stability in China without relying on external capital. However, he acknowledged the need for restructuring efforts to improve the business’s performance in the region.
Global automakers, including GM, have been challenged by the rise of affordable, feature-rich vehicles from Chinese manufacturers. This has led to increased investor scrutiny of GM’s Chinese operations, which have shifted from being a major profit contributor to becoming a financial burden over the past decade.
Last month, GM announced plans to collaborate with its joint venture partner in China to restructure its business and reduce expenses. Despite reporting a $104 million loss in China during the second quarter, Jacobson expressed confidence in the potential of GM’s operations there while stressing the importance of ongoing restructuring efforts.
Amid these challenges, some industry analysts have suggested that GM and other major U.S. automakers should consider exiting the Chinese market to focus on the expensive production of electric vehicles. However, GM remains determined to improve its position in China and capitalize on future opportunities in the region.
(With input from Reuters)
