General Motors’ Chinese joint venture GM-SAIC will close its plant in Shenyang before the end of February, according to Reuters. The closure of the plant, which produces Buick GL8 minivans and the Chevrolet Tracker SUV, is part of a larger restructuring effort as the automaker reckons with declining sales and fierce competition from local brands.
The development follows GM informing its shareholders in Q4 that it would need to record more than US$5bn in impairment charges for its Chinese operation, including restructuring costs between US$2.6-$2.9bn. Thousands of jobs were to be cut, in addition to plant closures. Unit volumes fell by almost 60% in the first 11 months of the year to just under 371,000 units. For contrast, BYD sold 3,757,336 units in China during the same time period.
GM recorded an overall loss in 2024 due to the impairment costs. To shore up its fortunes, it is enacting a new strategy: narrowing its product range to focus on the premium and electric segments. “Those are vehicles that are very desirable for certain Chinese consumers, that we can bring in and have a very successful business,” said Chief Executive Mary Barra at a recent Wolfe Research conference.
While it closes local plants, GM is also building out its exclusive import channel, the Durant Guild. This unit aims to have 14 flagship stores open in major cities by the end of Q1 2025. Seven have opened already in Shanghai, Beijing, Shenzhen, Chengdu, Shenyang, Xi’an and Hangzhou. The Durant Guild will focus on selling upmarket visions of the Yukon and Tahoe SUVs. The Yukon is sold in Denali specification for between CN¥808-898,000 (US$116,000+).
The Shenyang plant’s closure leaves GM with three production complexes in China; in Shanghai, Yantai and Wuhan, respectively. The extent to which these will also be affected by restructuring remains to be seen.
