Times Get Tougher for GM's Chinese Venture As Automaker Orders 3.3 Million Vehicle Recall

Steph Willems
by Steph Willems
times get tougher for gms chinese venture as automaker orders 3 3 million vehicle

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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  • Guitar man Guitar man on Sep 30, 2018

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

    • See 1 previous
    • APaGttH APaGttH on Sep 30, 2018

      @Peter Gazis Yup

  • Vehic1 Vehic1 on Oct 01, 2018

    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!

    • Inside Looking Out Inside Looking Out on Oct 01, 2018

      I never lived in tiny states. I live in California. In America nothing serious can be accomplished. Everything takes decades and tens of billions to get approved and in the end result is a catastrophic failure.

  • Kwik_Shift Once 15 Minute Cities start to be rolled out, you won't be far enough away from home to worry about range anxiety.
  • Bobbysirhan I'd like to look at all of the numbers. The eager sheep don't seem too upset about the $1,800 delta over home charging, suggesting that the total cost is truly obscene. Even spending Biden bucks, I don't need $1,800 of them to buy enough gasoline to cover 15,000 miles a year. Aren't expensive EVs supposed to make up for their initial expense, planet raping resource requirements, and the child slaves in the cobalt mines by saving money on energy? Stupid is as stupid does.
  • Slavuta Civic EX - very competent car. I hate the fact of CVT and small turbo+DI. But it is a good car. Good rear seat. Fix the steering and keep goingBut WRX is just a different planet.
  • SPPPP This rings oh so very hollow. To me, it sounds like the powers that be at Ford don't know which end is up, and therefore had to invent a new corporate position to serve as "bad guy" for layoffs and eventual scapegoat if (when) the quality problems continue.
  • Art Vandelay Tasos eats $#!t and puffs peters