By on September 29, 2018

Tariffs and other pressures are weighing on the once blistering hot Chinese new car market, and a suspension issue has now added new storm clouds to General Motors’ formerly sunny skies. The automaker’s Chinese arm, GM Shanghai, has announced the recall of 3.3 million Chevrolet, Buick, and Cadillac models.

Bad news for a foreign company in a suddenly dodgy market.

The news comes by way of China’s State Administration for Market Regulation, Reuters reports. Few details are available about the cause of the issue, or what models are involved in the recall. GM Shanghai, the company’s joint venture in that country, would only say a suspension arm can deform under “extreme operating conditions.”

Obviously, the conditions couldn’t be so extreme as to make the likelihood of suspension damage vanishingly rare.

After experiencing steady growth in China over the past few years, GM’s Chinese growth slowed to 0.7 percent in the second quarter of 2018. The third quarter isn’t looking good.  Over the last three months, new car sales in that country dropped at an increasing rate — from 5.4 percent, year over year, in July, to 7.4 percent in August. At last count, American automakers hold just a 10.7 percent market share.

GM, like Ford, suddenly finds itself with a price problem. In response to a 25 percent import tariff on Chinese-built vehicles levied by the U.S. in early July, China bumped its tariff on U.S. vehicles to 40 percent. That places upward pressure on sticker prices.

While the Chinese car market still represents great promise in the long run, the near future stands to be rockier than any OEM expected just a year ago. Giant recalls won’t help profits in that region, nor the perception of quality.

[Image: General Motors]

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39 Comments on “Times Get Tougher for GM’s Chinese Venture As Automaker Orders 3.3 Million Vehicle Recall...”

  • avatar

    In ….3,2,1 Deadweight and Buickman. BTW, if you think our economy is built on a house of cards, This is one place China has us beat hands down.

    Any country that in their “Tier One” cities where you can’t drink the water, or has open untreated sewers dumping into waterways, that is no threat to the USA or Western Europe.

    That country is backwards and only survives by censoring the internet, media and journalism. Not mention slave labor. Sorry, Fail.

    • 0 avatar
      Big Al from Oz

      I’m far from a China apolgist. But WTF are you stating in relation to Chinese infrastructure?

      The US and the “West” have a 100+ year headstart over China in infrastucture. China only has so much for infrastructure development and over the past 20-30 years they have made great strides developing infrastructure and general construction.

      I suppose your comment is justification for your insecurity.

      Be honest and objective. If you find this challenging and you need to denegrate the enemy with inaccurate statements supported by not so credible paradigms ….. the “enemy” has beaten you.

      • 0 avatar
        Peter Gazis

        China has had a 5000 year head start. With a population 4 times that of the U.S.
        Also if you look at demographics, for the past 30 years the Chinese haven’t had to spend their time changing diapers educating children or taking care of it seniors. Because of a low life span and one child policy, the percentage of Chinese who are very young or old is very low.

    • 0 avatar

      You mean like Flint? Or any major US city when it rains?

    • 0 avatar

      Yeah right, poor little China has to learn from USA. So what we can offer? People defecating on the streets in San Francisco and elsewhere in California (in 21 st century!), homeless people and drug addicts are everywhere. NEWLY BUILT Millennium Tower is sinking and leaning, California’s busiest NEWLY BUILT Bay Bridge has a serious issue with rust, NEWLY BUILT San Francisco transit hub has 2 cracked beams and is shut down. California tries and cannot build bullet train from SF to LA for more than 10 years already! Right, US shows the way for the rest of humanity using military force when necessary.

    • 0 avatar

      Who cares about how well the Chinese run their country?

      If they’re buying Buicks, their money is just as good as anyone else’s.

      Until Trump’s trade war (and the inevitable in-kind retaliation) prices Buicks out of the Chinese market, anyway.

  • avatar

    Bruick Verano remake in the picture? Not bad looking.

  • avatar
    Big Al from Oz

    The world needs to access and develop the immature Chinese market. There is scope for alot of money to be realised.

    I do believe the current US juanta in power will set the US back against competitors. The Chinese are in the process of developing more economic and trade liberalisation. Except for the US. This will impact US trade growth.

    The talk of belittling China’s infrastructure and pollution shows the ignorance and fear by the minority in the US. They fear competition, the Trumpeteers need to realise you will not become competitive via the use of beligerance and standover.

    China will and needs to change, Trump and his ragtag team of goons will only unite the World against US foreign and trade policy.

    The West more importantly the US manufacturers as their performance is subpar against global competition with an unsuitable product lineup.

    Maybe the US manufacturers will need to move out of the US to ensure their survival.

    • 0 avatar

      “Maybe the US manufacturers will need to move out of the US to ensure their survival.”

      The do it for a long time. Westinghouse, Kodak, Polaroid, Silvania, Xerox, Hoover, Marantz, Chrysler and list goes on and on. All now Japanese, Chinese or European companies and free from tyranny of Wall Street.

  • avatar

    What do you get when you mix Chinese JUNK with GM JUNK?


  • avatar
    Big Al from Oz

    Retaliatory methods the Chinese can use against the US has been discussed for a while now.

    Many of the Trumpeteer Anti Trade mob were not after fair trade. They seek domainance, even at the cost of their great nation the USA. They fear, fear and are insecure.

    Trump and his goofball alchemist orientated economists are screwing up. You can’t force people to buy American. You need product the customer wants. This a very basic business concept.

    The EU was prepared to have zero tariff auto trade with the USA, just as Trump wanted. Trump reneged.

    Trump had the Chinese prepared to bend on trade, but he just has no clue about business dealings. The EU would of helped the US with the Chinese, but Trump blew it. The Trans Pacific partners would od helped, but Trump blew it.

    He’s even antagonising the US’es most dreaded enemies the Canadians and Mexicans.

    Man, I just hope sanity comes to the White House.

    The US has by far the most to lose here. Global business is dominated by the US. This is what made the US great, not the military, pickup trucks or even those NRA freaks.

    What made America great was Americas ability to export a dream …… and make money out of it.

    • 0 avatar

      There are many US companies making goods that people want. But they’re building them in China with cheap labor and lax environmental standards. The goal is to build more of them here, or at least have a fair trade playing field.

      Our trade deficit with them is unacceptable. The theft of our intellectual property is unacceptable. The tariffs they have put on our vehicles for awhile are unacceptable.

      How come nobody was complaining about tariffs when it was just China and other countries doing it to us? Now all of a sudden it’s a huge deal. Hmm. Wonder why.

      • 0 avatar
        Big Al from Oz

        I really think it comes down to the consumer. Are they prepared to take even a 20%-25% hit in their standard of living to buy American? The American product will be no better.

        Form, fit and function vs cost.

        The view held by you and others the the World is screwing the US is a fallacy. The rest of the World confronts the same challenges. The differences are marginal.

        I think many in the US need to really look openly and honestly why the US is where it is. I would start from the high level of disparity, lack of health to how high manufacturing costs have reduced competitiveness.

        The US can compete, its just the World has a lot more competition now than 50 or 60 years ago.

        Everyone wants a better standard of living, the US doesn’t have a monopoly on this like in the past. The US is like 25% of the world now, or 25% of the World is like the US.

        Get used to this. This is a struggle many Americans feel insecure about.

        • 0 avatar

          I would agree that Americans need to be willing to pay more, and/or buy less [censored]. We are a wasteful society so I think the latter needs to be explored in the minds of consumers. We consume way too much. Maybe going on the wagon a bit via higher prices wouldn’t be a bad thing. It might encourage more savings too.

          Couldn’t disagree more with your second point. We are being screwed on trade. Look at our trade deficits with China and Mexico. I mean, do we have a trade surplus with anyone anymore? Anyone who tells you otherwise is [censored] on a plate and telling you it’s roast beef.

          China had huge tariffs on U.S. built cars well before Trump even announced he was running for President. If our automakers want access to their market, then they must build factories there – and of course subject all of their IP to theft. That’s BS. As I said, if Trump proposed that, there would be screams so loud, your eardrums would rupture. So why does the totalitarian communist regime get to get away with it?

          I would agree with your third point. Our unions, taxes and regulations have made us very noncompetitive with China and other countries. That has to be rolled back too as part of our recovery – to a point. Of course, the pro-trade leftists are all over Trump whenever he repeals any regulation, or lowers taxes. If he tried to weaken union power so we could be more competitive in manufacturing, there’d be screams of his attacks on the “middle class”.

          Definitely also agree with your fourth and fifth points. I’m not advocating for protectionism, just fair trade.

          • 0 avatar
            Big Al from Oz

            The US when it transitioned in the late 19th and first half of the 20th Century had protectionism to help build itself.

            Now, you are like the EU nations back then whining that the US produced cheap consumer crap.

            The US needs to see how the EU transformed, without war.

            Maybe just maybe the US manufacturing business model is now outmoded and needs refreshing.

            I know in retail the EU companies are outperforming US retail in Australia. Manufacturing the Asian model, mainly from the Japanese is outperforming the US and EU.

            The US needs to restructure how it works to become more efficient. Here’s some light reading you can do, read up on enterprise architecture and see how the US could improve.

            Countries work together in a similar fashion to how enterprises work. That is all have a stake or piece of the pie. So, when one become beligerant, ie, US this upsets the apple cart and other become p!ssed off. This is not productive and beneficial to the enterprise “arrangements” as had been made in the past.

            You just can’t change tact and expect all around you to accept when all have a stake in your business or country.

            The Trump Experiment will fail and fail dismally and it will take a while for the world to gain confidence back in the US, thus allowing the Chinese and even the Russians to gain a larger than needed foothold, increasing their influence.

            I find this quite short sighted by the White House and the Goon in Chief running the Clown convention.

    • 0 avatar

      And what evidence do you have that the Chinese were “prepared to bend?” Uh huh. You must be an industry person I bet!

      • 0 avatar
        Big Al from Oz

        There were plenty of articles from China stating they were prepared to make concessions with Trump.

        • 0 avatar

          What, from the Washington Compost or the New York Slimes? The fake news media of course wants you to think that China (which has gotten its way with our markets and with our companies with no resistance for two decades) was just about to cave in, but the evil and unhinged Trump spoiled things. I’m sorry but call me just a little cynical on that one.

          I think it’s going to take a ton of painful pressure on China to get them to change. It might be painful for us too but as they say, no pain, no gain. This should have been addressed years ago. Now Trump’s trying to clean up the mess. It won’t be easy.

          • 0 avatar
            Big Al from Oz

            Fake news?

            I think you’ll find that China will change, but not with bullying, but soft power.

            The US had a great Ally in the EU to help change the Chinese, but Trump blew it, or is that fake news?

            I think you people who want to believe in fake news because it doesn’t suit your paradigms are going to be in for a shock when reality strikes.

            The US can’t defeat China alone, it needs partners and Allies. Trump is really losing out here.

            Now look at what is unfolding with China, the Chinese will offer concessions to the EU and other countries and leave the US out.

            How is this good for the US?

            To MAGA people like you need to comprehend that the US doesn’t have the capacity to make the changes to bring back the “days of old”.

            All Trump is doing is being disruptive, and disruption brings a lack of confidence and the biggest loser will be the US.

            Collaboration is what is needed, not confrontation.

          • 0 avatar

            “The US needs to see how the EU transformed, without war.” Hmm, ok. Germany built its auto industry by charging a 10% tariff on U.S. cars, while they grew here due our 2.5% tariff on their cars. So how about we do that to help our auto industry? Oh wait…

            How is our business model (which is obviously just one model for all U.S. companies yes?) “outmoded”? Please explain.

            Enterprise architecture? LOL! Please give us your dissertation on how this should be applied to all U.S. companies.

            You sound like the typical leftist who tries to complicate the situation and then say “oh, there’s nothing that can be done, just restructure and by the way go to college.” That hasn’t worked, and it’s why Trump got elected.

            I’m willing to give him a chance to cut off the gravy train we’ve given the rest of the world ($810 billion trade deficit in goods in 2017) and bring them to the table for more fair terms!

          • 0 avatar
            Big Al from Oz

            Your comment omits the US’es protection of its industry, heavily reliant on large vehicles.

            Your dairy farmers subsidised, so why should Canada not protect its farmers. The list is long.

            I’m a conservative, but it seems the far right are now trying to call anyone who disagrees with them leftist.

            So sad when the anarchist like yourself can’t or don’t want to remember lessons of the past.

            Read up and educate yourself, learn to interpret information and data.

            When it scares you as it does now don’t blame others for your woes. Step up to the plate like an adult, not like a child who worries his sibbling got a 1/4″ more milk in his cup than you.

            Look for opportunities instead of creating issues as an excuse and the reason you are a failure.

            Sounds like I just described Trump.

          • 0 avatar

            You’re a deplorable cliche with a keyboard. I’m sure you get your news from respected sources, like Faux News.

          • 0 avatar

            If you feel in Canada is getting a raw deal then absolutely, tariff away. But you guys have a pretty sweet trade surplus with the U.S. (no I won’t hold this against you in the credibility of your argument ;-)) so I don’t know if I would want to be disturbing that, if were I Canada.

            Look, I understand you feel threatened. You’re obviously projecting that pretty clearly in your posts. But it is about time the US defended itself in the global economy. I think Canada should come to the table and talk to the U.S. about a fair trade deal so the parties can work together.

          • 0 avatar
            Big Al from Oz

            Actually there is a trade surplus in the US’es favour with Canada. The US exports more services to Canada than flows the other way and more than makes up for the minor manufacturing difference.

            Australia imports THREE times more from the US than the US from us. In a way the trade surplus (money) we have with China is moved to the US. So the US does get more back from China, but in a roundabout way.

            What is a bigger issue for the US is US government debt. In a couple of years debt payments (interest only) will be the biggest burden on the US taxpayer. Look at how well Trump is managing debt.

            Its not so simple, the world is an amazing place.

          • 0 avatar

            Uh huh. Now it’s your turn to read..


            There’s actually a 17.1 billion dollar trade deficit with Canada in goods if you view it correctly. We’re not talking about services here.

            Trade numbers are a complicated thing huh?

  • avatar

    TTAC has predicted doom and gloom for GM in China for over a decade…going back to the Bertel days. Still waiting.

    • 0 avatar
      Big Al from Oz

      I think it’s a little different this time around. The Chinese will want US companies to feel some pain. American Big Business has some heavy lobbying power.

      I think you’ll find if Trump continues on as he has the Chinese will gradually squeeze US business based in China. There is quite a lot of commentary regarding how the Chinese can make life difficult for US Business. Everything from customs, to regulatory quarantining will be used. I suppose using vehicle regulatory controls is another way.

      • 0 avatar

        That was one of the risks of going into a communist country and doing business. And past administrations are at fault too for letting China force U.S. companies to locate in China to do business there. I have no sympathy for them whatsoever to be bluntly honest with you. Let China squeeze them.

        China should be letting these companies build in the US and export instead of forcing them to locate their factories there. Can you imagine if the Trump Administration proposed the same restrictions on foreign companies you wanted to do business here? You would hear the screams from deep outer space.

        • 0 avatar

          China is not a Communist country – can you even define Communism?

          • 0 avatar

            @APaGttH – Uh huh. It’s run by a totalitarian undemocratic regime that has no respect for human rights and represses its people.

            Per it’s Constitution it “is a socialist state under the people’s democratic dictatorship led by the working class and based on the alliance of workers and peasants.” That’s not communist?

            I will give you my plate of “roast beef” back, which I don’t want. I really hope Trump presses ahead and the voters are not dumb enough to vote Democrat in 2020, whether or not some in here might be looking for a new line of work. Make America great again!

        • 0 avatar
          Big Al from Oz

          The US is squeezing countries as well, I don’t disagree with the countries that are being squeezed, but China will look after China’s interests first.

          The problem is China is becoming a dominant player and the US is losing dominance, the US to maintain dominance must work with others to maintain a degree of control over China.

          US alone will not win out here. The EU, Japan, US actually most of the OECD need to form a Trade Pact so we can take on the Chinese for a couple of Centuries, not an election cycle.

          • 0 avatar

            I think we both agree that China has to be controlled. But from the U.S.’ perspective I don’t know why we need to sell our souls to other countries who have been kind of raping us over the coals since World War II – in a lot of areas.

            At risk of sounding arrogant, the U.S. is too important of a market for the rest of the world to ignore. We consume like no other. And the U.S. has resources to survive even if it was completely isolated, which I don’t think is going to happen.

            I think the tariffs will work. If it was otherwise, our stock market would be tanking. Yet it is not. That should tell you a lot.

          • 0 avatar
            Big Al from Oz

            The Chinese and EU consume similar amounts. Then add Japan, Australia, NZ, Korea, Taiwan, HK, etc we consume the same or more.

            The US is a large market, but unlike the few decades after WWII the US is becoming more like the rest of us.

            Trump wants bilateral agreements so he can bully the US position. The EU and China are pretty much equals to the US. His tactics will turn nations away. It will be interesting to see who Canada starts to “bed” with in trade, so it isn’t reliant on a less than reliable neighbour.

            In a decade, even with Trump’s beligerance China will be dominant. China will also woo as many countries as possible. In the end Trump might have done the World a favour, China will be better for us at the expence of the US. The US will still be able to manage Canada and Mexico.

  • avatar
    Guitar man

    GM sales fell, but at well below the average. Most GM vehicles (95% +) are made in China so the tariffs have no effect whatsoever.

  • avatar

    Inside Looking Out: Apparently, you’ve forgotten about the addicts in WV, the toxic water in Flint, coal ash and hog waste in rivers of NC, the tiny populations/often struggling economies of other states (relative to California).
    But – least them ain’t so dang lib’ral!

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