General Motors (NYSE:GM) shares were flat first thing Thursday, after the company president said he believes it can regain market share in China after hitting a roughly 20-year low last year amid changing market conditions and increased domestic competition.
Mark Reuss said new all-electric and plug-in hybrid electric vehicles, as well as the re-design of its Buick brand, will help the automaker turn around operations in the region.
GM’s market share in China, including its joint ventures, has plummeted from roughly 15% as recently as 2015 to 8.6% last year — the first time it has dropped below 9% since 2003. GM’s earnings from the operations have also fallen, down 78.5% since peaking in 2014, according to regulatory filings.
Reuss also touted the competitiveness of GM’s Chinese joint venture partners such as Wuling Motors. GM first established operations in China in 1997.
GM’s market share declines in China are the result of growing competition from government-backed domestic automakers fueled by nationalism and a generational shift in consumer perceptions of the automotive industry and electric vehicles. The company, along with other American-based automakers, is managing geopolitical tensions between China and the U.S.
GM’s U.S.-based brands such as Buick and Chevrolet have seen Chinese sales drop more than those of its joint venture. The joint venture models accounted for about 60% of GM’s 2.1 million vehicles sold last year in China.
GM shares dipped two cents to $45.03.