General Motors stated its committed to building a profitable and sustainable operation in China in spite of stiff local competition as well as mountin
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General Motors said on Thursday it was committed to building a profitable and self-sustainable operation in China, despite facing stiff competition from local brands and growing pressure to exit the Chinese market.
Shares of GM rose four per cent in morning trading.
“We’re committed to maintaining cash stability there at a point where it’s self-sustaining. That means not needing any capital from outside,” GM CFO Paul Jacobson said at an auto conference organised by J.P. Morgan.
Global automakers have struggled to make headway in China as local manufacturers continue to release feature-packed affordable models.
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GM has also been facing increasing investor scrutiny on its China operation, which in the past decade has shifted from being a profit engine to a drain on the company’s finances.
Jacobson said the Detroit automaker’s operations in China could be a good asset but reaffirmed that it needed some restructuring. “I don’t necessarily accept the notion that we’re struggling to make money there,” Jacobson said.
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A leading automotive analyst in June also called on the Detroit Three to withdraw from China to save cash to spend on costly EV production.
GM recorded a $104 million loss in China during the second quarter, a disappointment after executives said they expected to be profitable in the region.
First Published Date: 11 Aug 2024, 15:15 PM IST
