The competition from Chinese brands is not scary General Motors. The American giant has in fact confirmed its dedication in wanting to build a business profitable and self-sustaining in the Asian country, despite the fierce rivalry with local electric car manufacturers. What does self-sustainable mean? GM’s Chief Financial Officer and General Manager, Paul Jacobson, explained it very well at an automotive conference organized by JP Morgan.
Commitment to China
“We are committed to maintaining liquidity stability in China to a point where it is self-sufficient. This means not need external capitalthe”, commented Paul Jacobson. After reiterating the company’s commitment to the Chinese market, GM’s shares have increased by more than 4%. The challenge is far from simple: several global automakers are struggling to make headway in the Asian country, not to mention that at the same time local manufacturers are continuing to release affordable and feature-rich models.
How many difficulties for GM
For GM the matter is even more complicated. As Reuters reported, in fact, the US giant has had to face increasing scrutiny from investors over its activities in China, which over the past decade have gone from being a profit driver to a drain on the company’s finances. Not surprisingly, just last month GM itself announced that it will work with its JV partner in the Asian country to restructure its business, and that it plans to cut spending in China.
Possible resource
“I don’t necessarily buy the idea that we’re fighting to make money there.”added Jacobson, noting that GM’s operations in China could be a good resourcebut reaffirming the need for some restructuring. Recall that the company recorded a loss of 104 million dollars in China during the second quarter of this year, a disappointment after executives said they expected profits in the region.
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