Monday 6 May 2024

CEO Mary Barra Says General Motors ‘Committed to China’ Despite $106M in Quarterly Losses

 Despite losses in the first quarter of 2024, General Motors (GM) CEO Mary Barra says the Detroit-based automaker is “committed to China” with plans to go all-in with Electric Vehicles (EVs).

In the first quarter of the year, GM saw losses of $106 million in China, CNBC reports. It is a blow to GM, which from 2010 through 2023 counted the Chinese market as its biggest seller.

CNBC also notes GM’s declining market share in China:

GM’s market share in China, including its joint ventures, has plummeted from roughly 15% as recently as 2015 to 8.6% last year — the first time it has dropped below 9% since 2003. GM’s earnings from the operations have also fallen, down 78.5% since peaking in 2014, according to regulatory filings. [Emphasis added]

Other than the first quarter of this year, the only quarterly losses for GM in China since 2009 were a $167 million shortfall during the first quarter of 2020 due to the coronavirus pandemic and an $87 million loss during the second quarter of 2022. [Emphasis added]

During an earnings call late last month, Barra suggested she has no plans to pull GM out of China despite the losses in the first quarter.

“Over the long term, we’re committed to China,” Barra said, according to CNBC. “We believe that it’s a market that — over the medium term — will have substantial growth.”

General Motors and China flags fly at the company’s China headquarters in Shanghai on April 19, 2013. (PETER PARKS/AFP/Getty Images)

Unused charging stations for General Motors’ Buick Velite electric vehicle (EV) stand outside the company’s dealership in Shanghai, China, on July 17, 2019. (Gilles Sabrie/Bloomberg via Getty Images)

That growth, Barra predicts, will be fueled by GM’s EV sales in China. 

“We think clearly that market has shifted and the landscape has shifted … with the capability of the Chinese [automakers]. But we still think there’s a role and a place for GM to play with luxury premium,” Barra said.

Meanwhile, former GM executive Bob Lutz is making a vastly different prediction, tellingFox News Digital last week that the transition to EVs is a “colossal mistake” for the American auto industry.

Lutz said:

The problem with the whole EV movement is that there was a colossal amount of hype behind it, from what I like to call the liberal mainstream media, making it sound like everyone’s next vehicle was going to be an EV. And of course the government was pushing it because of their climate change policies. And it just plain wasn’t going to happen, the American public … not even the Chinese public, nobody is ready to get pushed into EVs before the whole infrastructure and the situation is right for them.

“Trying to get it done overnight was a colossal mistake,” Lutz said.

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