Major American Automaker To Take $5 Billion Hit For Operations In China Amid Steep Competition

General Motors (GM) said Wednesday that it would record two non-cash charges totaling over $5 billion on its joint venture operations with SAIC Motors in China, according to Reuters.

The automaker expects a $2.7 billion charge for reduced joint-venture value and a $2.6 billion to $2.9 billion charge for restructuring costs, according to Reuters. GM has struggled in the Chinese auto market, and lost about $350 million in the region in the first three quarters of 2024, Reuters reported.

China’s auto industry has seen robust demand and has experienced a boost in car sales largely bolstered by government subsidy programs and tax rebates. Chinese vehicle sales rose 4.3% in September from the previous year, in part due to subsidies for buyers trading in older vehicles for electric vehicles (EVs) and more fuel-efficient vehicles, according to Reuters.

U.S. and European carmakers are increasingly struggling to compete in China’s EV market, partly due to high production costs and Chinese manufacturers’ increasingly technologically competitive vehicles, according to CNBC. GM announced