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General Motors

Recently, foreign media reported that General Motors is planning to lay off employees and restructure its business in China.

On August 14, GM China responded to the news to The Paper, saying that our partnership with SAIC and our commitment to promoting the long-term development of the joint venture have not changed. We will continue to provide Chinese consumers with our best products and technologies and make good product plans for the future. As GM Chief Financial Officer Paul Jacobson said at an investor conference last week, "China's business is a high-quality asset for us now and in the future."

GM China stressed that "in order to achieve long-term development goals, our cooperation and communication with our joint venture partner SAIC Motor is closer than ever before to achieve profitable and sustainable development."

Earlier, foreign media quoted sources as saying that GM plans to carry out larger-scale structural reforms to its business in China, including layoffs, production cuts, and business restructuring. Because GM realizes that its sales are unlikely to return to the peak level of 2017. This reassessment represents a major shift in GM's strategy. Sources also said that the planned restructuring involves GM's electrification transformation and a focus on more premium models.

In fact, in recent years, General Motors has been actively promoting high-end import business in China and expanding electric vehicle production capacity.

In June 2022, GM signed a project investment intention agreement with Shanghai Pudong New Area, announcing that it plans to increase investment by US$100 million to build a new high-end import business and establish the "Dolange" platform, which will introduce star products of various brands under GM. According to information released by GM, the first Dolange brand center in China will soon open in Shanghai.

The aforementioned foreign media report also mentioned that in China, the world's largest automobile market, foreign brands compete with many local rivals and face huge overcapacity.

The production and sales report released by SAIC Group showed that SAIC-GM's sales in July were 15,000 vehicles, a sharp drop of 82.42% year-on-year; the cumulative sales from January to July this year were 240,600 vehicles, a year-on-year decrease of 55.14%.

Like GM, joint venture brands that once dominated the Chinese auto market are facing a continued decline in market share.

The latest statistics from the China Passenger Car Association show that in July, mainstream joint venture brands sold 440,000 vehicles, down 25% year-on-year and 8% month-on-month. Among them, German brands represented by Volkswagen had a retail share of 17.6%, down 2.9 percentage points year-on-year; Japanese brands such as Toyota and Honda had a retail share of 12.9%, down 3 percentage points year-on-year; and American brands such as GM and Ford had a market share of 5.8%, down 1.9 percentage points year-on-year.

It is worth noting that GM's joint venture in China, SAIC-GM, has just announced a senior personnel change. Lu Xiao, former executive vice president of Pan Asia Technical Automotive Center, replaced Zhuang Jingxiong as general manager of SAIC-GM.

Lu Xiao joined Pan Asia Technical Automotive Center in 1997 and served as Chief Engineer of Midsize Vehicle Platform, Executive Director of Project Management, Deputy General Manager and Executive Deputy General Manager of Pan Asia Technical Automotive Center. He led the development of important models such as Buick Regal, LaCrosse, and Chevrolet Malibu, and became the first Chinese Chief Engineer of GM's global platform. Pan Asia Technical Automotive Center is an automotive design and development center jointly established by GM and SAIC.