Recently, it was reported that General Motors is cutting personnel in relevant departments in the Chinese market, including the research and development department. In the coming weeks, General Motors and SAIC Group will discuss possible capacity cuts as part of the company's sales strategy adjustment in China.
Regarding this, a reporter from the Daily Economic News asked General Motors China for verification, but did not receive a positive response. However, General Motors China stated, "Our partnership with SAIC Group and our commitment to promoting the long-term development of the joint venture have not changed. We will continue to provide our best products and technologies to Chinese consumers and plan our products for the future
Previously, Paul Jacobson, the Chief Financial Officer of General Motors, hinted at the possibility of restructuring the Chinese business in an investor report. General Motors China emphasized, "As Paul Jacobson said at the investor conference last week, the Chinese business is a high-quality asset for our present and future
It is worth mentioning that the contract between General Motors and SAIC Group will expire in 2027, and there are reports that General Motors hopes to restore its business to sustained profitability before the expiration. In order to achieve long-term development goals, our cooperation and communication with our joint venture partner SAIC Group are closer than ever to achieve profitability and sustainable development, "said General Motors China
Behind many rumors, General Motors is under pressure in the Chinese market. According to data from the China Association of Automobile Manufacturers, the market share of American joint venture cars was 6.7% in the first six months of this year. Last year, this data was 7.9%.
China Association of Automobile Manufacturers
Specifically, in the second quarter of this year, General Motors' retail sales in the Chinese market exceeded 370000 vehicles, lower than the 440000 vehicles sold in the first quarter of this year.
Some argue that General Motors' sales performance is somewhat related to the slow transition to electrification and new energy.
On the level of intelligent functionality, a Buick brand car salesperson told reporters, "We do realize that in the field of car infotainment, some experiences may not be as good as new forces in car manufacturing, which to some extent affects consumer decision-making and is an area that needs to be improved and enhanced. However, our Autoenergy platform puts safety first, and the safety of the three electric systems is something that consumers can trust, which is also the greatest competitiveness of Autoenergy models
At the level of electrification, General Motors China is rapidly introducing new energy products based on the Autoenergy platform. Looking at it, Cadillac has two pure electric models under its brand, the Ruige and Aoge; Buick brand has E4, E5, GL8 Land Cruiser PHEV, and Weilan 6 pure electric vehicle models built on the Autoenergy platform; Chevrolet has the Explorer Plus, Changxun, and the planned Explorer EV models.
In terms of sales, General Motors' new energy vehicle sales increased by 24.1% year-on-year in the second quarter of this year, exceeding 143000 units, accounting for 38% of the total quarterly sales. General Motors China stated that it will continue this momentum in 2024 with the release of intensive new energy products.
In addition, General Motors' global performance is still impressive. The second quarter financial report shows that General Motors' net income reached $48 billion, net profit reached $2.9 billion, and adjusted pre tax profit reached $4.4 billion. Based on this performance, General Motors has adjusted its full year financial forecast, with pre tax profit raised from the range of $12.5 billion to $14.5 billion to the range of $13 billion to $15 billion; The cash flow of the automotive business has been raised from the range of $8.5 billion to $10.5 billion to the range of $9.5 billion to $11.5 billion. General Motors' performance and revenue in the global market may provide more support for its business and development in the Chinese market.
