Why General Motors Just Took A $5 Billion Hit In China

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Why General Motors Just Took A $5 Billion Hit In China
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GM's once-lucrative China operation is getting hammered. Now it needs a total revamp, and an expensive one.

For much of this year, we've been covering the rise of the Chinese auto industry as primarily a problem for the European auto industry. Every car company has lost sales in their biggest market as the local competition got better and better, but Volkswagen and others have to do battle with BYD, MG and the rest on their own turf. Tariffs here in the U.S. have kept that problem away from our shores.

which builds Chevrolet, Buick and Cadillac vehicles, is one of two joint ventures for the automaker in China. I don't think I need to explain how much $5 billion is a lot of money, but just in case, let's put that write-down into perspective a bit. GM's global net income before taxes in 2023 was $12.4 billion. Its profits in Q3 of this year before taxes was $4.1 billion. It is projecting pre-tax annual profits of between $14 billion and $15 billion for 2024.

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