General Motors has entered preliminary talks with China’s SAIC Motor to extend its joint venture, signaling a cautious revival of the American automaker’s outlook in the world’s largest car market. The discussions, which remain at an early stage, cover potential decisions on vehicle models and production facilities, though final terms have yet to be defined.
The nearly three-decade-old partnership, set to expire in 2027, is being revisited amid signs of recovery following years of steep decline. The move contrasts with last year’s $5 billion restructuring, when GM and SAIC scaled back operations and cut jobs. The setback reflected a broader retreat by foreign automakers, many of whom have struggled to maintain market share as Chinese companies consolidated dominance. Some players, such as Stellantis, have exited joint ventures altogether.
Once a major profit driver, China contributed up to $2 billion annually to GM and was its largest market for over a decade. But declining sales and a rapid domestic shift to electric vehicles eroded its position, allowing the U.S. to reclaim the top spot in 2023. GM, caught off guard by the pace of change, has since sought to catch up with local EV leaders, including BYD.
Recent results suggest a rebound. GM earned $116 million from its China operations this year, with second-quarter sales rising 20% to 447,000 units. Buick and Cadillac deliveries grew by nearly 30% in the first eight months, while its Wuling joint venture, known for small electric and gasoline-powered cars, surged 37%. Many Wuling models are now exported, particularly to Mexico, where affordable Chevrolet vehicles are gaining traction.
Despite these gains, challenges persist. China’s auto sector remains mired in a prolonged price war and oversupply, leaving factories producing gasoline-powered vehicles underutilized. SAIC has introduced fixed pricing on certain models, including the Cadillac CT5 sedan, in an effort to stabilize competition and limit heavy dealership discounts.
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