General Motors is confident in its ability to regain market share in China, following a decline to a nearly 20-year low last year due to evolving market dynamics and heightened competition from local players, stated GM President Mark Reuss on Thursday.
Reuss, a seasoned executive at GM, emphasized that the introduction of new all-electric and plug-in hybrid electric vehicles, alongside the revamping of its Buick brand, will be instrumental in revitalizing the company’s operations in the region.
GM’s market share in China, including its joint ventures, has dwindled from around 15% in 2015 to 8.6% last year — marking the first time it has fallen below 9% since 2003. Moreover, GM’s earnings from its Chinese operations have seen a significant decline, dropping by 78.5% since reaching a peak in 2014, according to regulatory filings.
Reuss also highlighted the competitive edge provided by GM’s Chinese joint venture partners, such as Wuling Motors. Reflecting on GM’s longstanding presence in China since 1997, Reuss remarked during the Financial Times Future of the Car Summit, “We have an advantage there with Buick and Wuling, and it goes both ways.”
The decline in GM’s market share in China can be attributed to intensified competition from government-backed domestic automakers, driven by nationalistic sentiments and evolving consumer preferences towards the automotive industry and electric vehicles.
GM, along with other U.S.-based automakers, is facing the effect of geopolitical tensions between China and the United States.
While GM’s U.S.-based brands like Buick and Chevrolet have experienced a sharper decline in Chinese sales compared to their joint venture counterparts, these joint venture models constituted approximately 60% of GM’s 2.1 million vehicles sold in China last year.
The downturn in the market has raised questions about GM’s potential exit from China, similar to its departure from other underperforming markets in recent years. However, Reuss affirmed on Thursday that GM intends to maintain its presence in China “for the foreseeable future.”
GM CEO Mary Barra echoed this sentiment to investors in February, emphasizing the company’s commitment to ensuring a strong future in China that generates the right profitability and return for investors.
In a related development, GM announced a “leadership transition” in China on Tuesday. The company revealed that Steve Hill, currently GM’s vice president of global commercial operations, will assume the role of GM China President, succeeding Julian Blissett, effective June 1.
