Bloomberg Businessweek - USA (2019-11-25)

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● As the carmaker plays

catch-up on EVs, Chinese

consumers are turning away

Barra said in an earnings call in October. “We’re also

seeing a lot of pricing pressures.” She promised to

cut costs and improve the company’s product mix.

It’s all a far cry from a decade ago, when GM

wasthetopforeignautomakerinthemarket.It

formedjointventureswithlocalpartnerssuchas

ShanghaiAutomotiveIndustryCorp.Theventure’s

BuickNewCenturysedansstartedrollingoffthe

assemblylinein1999,twoyearsafterGMandSAIC

joinedforces,andquicklywonoverChinesedriv-

ersandpassengers,includinggovernmentofficials.

DuringtheworstoftheGreatRecession,whenGM

wasonlifesupportintheU.S.,strengthinChina

providedtheAmericanparentwitha much-needed

financialcushion.

Stillrecoveringfromitsgovernmentrescue,

GM’seight-yearreignasthetopforeignautomaker

inChinaendedin 2013 asVolkswagentookonthat

distinction.Morerecently,it’sstruggledasU.S.

autobrandshavefaceda backlashfromChinese

consumersdeterredbyU.S.PresidentTrump’strade

policieswithChina,BloombergIntelligenceanalyst

KevinKimsaidina reportpublishedonNov.4.

ShipmentsfromtwoofSAICandGM’spassenger-car

jointventures,whichexcludeimportedandcom-

mercialvehicles, “nosedived”inthefirst nine

monthsof2019,accordingtothereport.

Partoftheproblemhasbeenstalemodels.

Barra’sglobalturnaroundstrategydependson

anambitious plan to introduce about 20 new

or updated models, including EVs and hybrids,

this year. The company has a raft of vehicles

Edited by

James E. Ellis and

Dimitra Kessenides

ThefutureforGeneralMotorsCo.inChinais inthe

handsofcustomerslikeYangYanjun,a 46-year-old

logisticsexecutiveinShanghai.Yangandhisfamily

own two gasoline-powered cars—a Volkswagen and

an Audi—and now he’s considering whether to go

electric. Strolling through a Buick showroom in

eastern Shanghai, he stops to admire one of GM’s

newest electric vehicles, a powder-blue Velite 

that’s wrapped with a giant red bow and costs

less than $27,000. “It’s time for a change,” he says.

“We’re ready to try something new.”

Mary Barra, GM’s chief executive officer, who of

late is managing labor strife at home, needs more

such converts to reverse the automaker’s slide in

China. The world’s biggest auto market is suffer-

ing through a year-and-a-half slump exacerbated

by China’s lackluster economy and the trade war

with the U.S.

GM’s position is especially weak. While Cadillac

has been a bright spot, sales of its Buick and

Chevrolet brands have taken a beating, and GM’s

overall passenger-vehicle retail sales plunged 18%

through October, according to data from China

Automotive Information Net, comparedwitha 4%

decline in the overall market. “In China,thebusi-

ness environment remains challenging andvolatile,”

Is China Still GM’s Prom ised Land?