GM will be continuing to manufacture low priced cars and EVs in association with SAIC and Wuling Motors and they will be exported from China.
The US-based global car manufacturer General Motors (GM) is reportedly terminating its employees in China and is expected to have a meeting with SAIC to set-up massive structural operations to improve its sales. Since 2017, GM has been struggling to have sales profit at the peak level. Currently, the workforce associated with the market department, including R&D, has been asked to shake hands with the company.
The decision on further capacity cuts will be decided in the coming week based on the current and upcoming revenue projections. Reports also added that the inspection showcased a crucial shift in strategy for the company, which grabbed billions of dollars of revenue in China in 2018. The US based car-maker is forced to take this decision owing to the fact that several multinational car brands are facing stiff competition from China’s local car companies.
GM’s restructuring is being done to produce top-notch electric vehicles and also import them, people familiar with the matter said. Decisions on factory capacity reductions and further employment terminations are yet to be finalized, according to the unnamed sources. Reports also added that the company will continue to manufacture low priced cars and EVs in association with SAIC and Wuling Motors. Many of those vehicles will be exported from China.
GM mentioned that car manufacturers in China are giving more priority to gaining market share than profits, which is putting a lot of pressure on sales volume. Due to this scenario, the company is forced to work with the local companies to repair its entire operations. The quarter ended in June, around $104 billion borne by GM on its Chinese operations, while the total loss in Q1 amounted to $210 million.
GM is one of the very few non-Chinese global car-markers, which has been manufacturing vehicles in China for a very long time. In 2017, sales reached 4 million, but in the last year, it slumped by around 2.1 million. In the last quarter, GM’s sales in China have fallen by 29 percent, which is around 3,73,000 cars. This includes the company’s leading brands such as Buick, Cadillac and Chevrolet. Therefore, the US based car-maker has decided to manufacture cars in China in association with domestic firms. It will help in making compact EVs in China, whose demand is soaring high.
