General Motors Faces Challenges and Competition in China’s Market
China continues to be a vital market for General Motors (GM), standing as the company’s second-largest market after the U.S. GM operates in China via two significant joint ventures: SAIC-GM, which markets Chevrolet, Buick, and Cadillac, and SAIC-GM-Wuling, focusing on new energy vehicles (NEVs).
Sales Performance and Future Strategies
In the first quarter of 2025, GM reported deliveries of 442,000 vehicles in China, remaining nearly the same compared to the previous year but reflecting a substantial sequential decline of 26.3%. Despite the challenges, the sales of GM’s new energy vehicles saw a robust increase of 53.2% year over year. To enhance its competitive edge, GM intends to broaden its NEV lineup, ensuring that by 2025, all newly introduced local models come with at least one NEV option.
The Buick GL8 stood out as the leading model in the premium MPV sector with 24,000 units sold. Additionally, the Wuling Hong Guang MINIEV maintained its popularity, while both the LaCrosse and Envision Plus models experienced solid sales growth. Notably, deliveries for the Chevrolet Tahoe commenced in March under GM’s Durant Guild platform.
Nevertheless, GM faces hurdles in China due to evolving regulations and competition from lower-priced local automotive brands. In response, the company initiated a significant restructuring of its Chinese operations last year, which included cost-cutting measures, rightsizing, and refreshing its product lineup. These strategies appear to yield positive results, as the last quarter of 2024 showed favorable equity income, excluding $5 billion in restructuring expenses. GM’s goal for this year is to restore profitability in the Chinese market.
Increasing Competition in the EV Market
Tesla is also experiencing increasing pressure in China. Although Tesla does not provide specific regional delivery figures, data from the China Passenger Car Association indicates that Tesla’s China-made EV sales fell by 11.5%, 49%, and 11.5% year over year in January, February, and March, respectively.
Conversely, BYD Co Ltd is making significant strides. In the first quarter of 2025, BYD delivered 416,388 battery electric vehicles (BEVs), outperforming Tesla, which delivered 336,681 units. This marks the second consecutive quarter where BYD has led the global EV market. With its aggressive expansion strategy and innovative technology, BYD is poised to secure Tesla’s position in the EV sector.
As local manufacturers increasingly dominate the automotive landscape, General Motors must amplify its efforts to enhance its market share in China.
General Motors Financial Outlook
General Motors’ stock has declined approximately 14% year to date, contrary to the industry’s steeper decline of 24%.
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In terms of valuation, GM currently trades at a forward price-to-earnings ratio of 3.96, which is notably lower than the industry average. This gives GM a Value Score of A.
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The Zacks Consensus Estimate for GM’s Q1 earnings per share (EPS) has decreased in the past month, whereas the estimates for Q2 have increased. While EPS estimates for the full year 2025 have risen, the forecast for 2026 remains unchanged over the same period.
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GM’s stock currently holds a Zacks Rank of #3 (Hold). Investors can view the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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General Motors Company (GM): Free Stock Analysis report.
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This article originally published on Zacks Investment Research (zacks.com).
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