GM has a China problem
General Motors suffered a $210 million equity loss so far this year from its Chinese joint venture with with state-owned SAIC.
The automaker, faced with declining demand in China, said it has taken steps to reduce inventories to limit losses. “But it's clear the steps we have taken, while significant, have not been enough,” GM chief executive Paul Jacobson told analysts on Tuesday.
GM had an otherwise successful quarter, beating Wall Street expectations. It raised its full-year guidance by about $1 billion, but it could’ve been about $2 billion if it wasn’t for underperformance in China, Jacobson said.
“We had expected to return to profitability in China in the second quarter,” Jacobson said. “However, we reported a loss, and we expect the rest of the year will remain challenging because the headwinds are not easing."
GM had an otherwise successful quarter, beating Wall Street expectations. It raised its full-year guidance by about $1 billion, but it could’ve been about $2 billion if it wasn’t for underperformance in China, Jacobson said.
“We had expected to return to profitability in China in the second quarter,” Jacobson said. “However, we reported a loss, and we expect the rest of the year will remain challenging because the headwinds are not easing."
