GM President Mark Reuss announces a $2.2 billion investment in the automaker’s Detroit-Hamtramck Assembly plant in Michigan for new all-electric trucks and autonomous vehicles on Jan. 27, 2020.
Michael Wayland / CNBC
DETROIT – General Motors believes it can regain market share in China after hitting a roughly 20-year low last year amid changing market conditions and increased domestic competition, GM President Mark Reuss said Thursday.
The longtime GM executive said new all-electric and plug-in hybrid electric vehicles, as well as the redesign of its Buick brand, will help the automaker turn around operations in the region.
GM’s market share in China, including its joint ventures, has plummeted from roughly 15% as recently as 2015 to 8.6% last year — the first time it has dropped below 9% since 2003. GM’s earnings from the operations have also fallen, down 78.5% since peaking in 2014, according to regulatory filings.
Reuss also touted the competitiveness of GM’s Chinese joint venture partners such as Wuling Motors. GM first established operations in China in 1997.
“You can look at it any way you want from a larger geopolitical standpoint, but for us in China, this has been a great advantage for us to be partnered so deeply for so many years with our JV partners there,” Reuss said during the Financial Times Future of the Car Summit. “We have an advantage there with Buick and Wuling, and it goes both ways.”
GM’s market share declines in China are the result of growing competition from government-backed domestic automakers fueled by nationalism and a generational shift in consumer perceptions of the automotive industry and electric vehicles. The company, along with other American-based automakers, is managing geopolitical tensions between China and the U.S.
GM’s U.S.-based brands such as Buick and Chevrolet have seen Chinese sales drop more than those of its joint venture. The joint venture models accounted for about 60% of GM’s 2.1 million vehicles sold last year in China.
The market declines have spurred questions on whether GM would exit China, as it has other underperforming markets in recent years.
GM CEO Mary Barra told investors in February that “nothing is off the table in ensuring that GM has a strong future to generate the right profitability and the right return for our investors” in China.
GM on Tuesday announced a “leadership transition” in China. The automaker said Steve Hill, currently GM’s vice president of global commercial operations, would succeed GM China President Julian Blissett, effective June 1.