Listen, I'm happy to forgive the Chinese for sending us the pandemic but this is too much. On the other hand I would be willing to try purchasing a BYD if I could buy one duty free...and would it be too much to ask for the $7,500 federal rebate?
BTW...need a the chart be blue? It might be nice to introduce a wider color pallet?
How China Is Becoming a Money Pit for Foreign Automakers, in Charts
Volkswagen, GM and other big brands are losing their grip on a once-lucrative market as Chinese consumers embrace homegrown electric vehicles
By Stephen Wilmot, WSJ
Aug. 17, 2024 9:00 pm ET
China was a gold mine for global automakers a decade ago. Not anymore.
“Very few people are making money” in China, General Motors Chief Executive Mary Barra told investors in July.
A jarring new data point came earlier this month when Germany’s Volkswagen reported its first quarterly loss in at least 15 years from joint ventures and associates. These include its big Chinese JVs and have long been seen by investors as a proxy for its business in the country.
For the largest global automakers, profits in China have been hit by falling sales as consumers embrace electric vehicles from homegrown brands such as BYD, which last year supplanted Volkswagen as China’s bestselling carmaker.
In July, EVs and plug-in hybrids accounted for over half of all cars sold in the country for the first time, while the share shipped to dealers by non-Chinese brands slipped to 33%, down from 50% two years earlier.
Another problem is falling prices in a marketplace besieged by new entrants. Like for like, Chinese vehicle prices in June were more than 6% lower than a year before, according to brokerage Bernstein.
Volkswagen has been spending heavily to regain ground, with a focus on local partnerships under the strategic banner “in China, for China.”
GM was another giant of the Chinese car market, selling more than four million vehicles at the 2017 peak, similar to Volkswagen. By 2023 GM’s annual sales had almost halved, and this year its JVs have reported their first consecutive quarterly losses since its 2009 bankruptcy.
Having pulled out of Europe, India and other countries, Barra has earned a reputation for cutting losses in global markets where GM couldn’t make money. Its troubled JV with Chinese automaker SAIC, which makes Buicks, Chevrolets and Cadillacs locally, expires in May 2027.
GM has said it is working with its partners to restructure its China business, which it says is profitable. “I don’t necessarily accept the notion that we’re struggling to make money there,” Chief Financial Officer Paul Jacobson said at an investor conference this month.
It is tougher for global manufacturers to leave China than other markets because it is the global hub for making and, increasingly, exporting EVs.
“You don’t exit China lightly. It’s not just your business there; it is also about the influence of Chinese suppliers and consumers,” said Philippe Houchois, an analyst at brokerage Jefferies.
Chrysler owner Stellantis pulled out of manufacturing cars in China in 2022 after its JV that made Jeeps filed for bankruptcy. But it returned to the country a year later by buying a roughly 20% stake in Chinese EV startup Zhejiang Leapmotor Technology. Last month a new JV between the two companies shipped a first batch of Leapmotor EVs to Europe.
Tesla’s China business, which took off in 2020 after Beijing gave it permission to open a wholly-owned factory near Shanghai, is also suffering.
Because it wasn’t required to hook up with a local automaker, the company doesn’t report equity income from joint ventures as its peers do, and it doesn’t disclose regional profit. However, Tesla’s share of revenue from China slipped to less than a fifth in the first half of 2024, down from more than a quarter at the 2021 peak.
Manufacturers from China’s Asian neighbors aren’t faring better, according to the latest results. Toyota’s Chinese JV income fell 73% in the quarter through June compared with the same period of 2023, while Honda’s equity income was all but wiped out.
“Global automakers in China still haven’t found a bottom,” said Tu Le, managing director of industry research firm Sino Auto Insights.
Opmerkingen