By Kalea Hall
DETROIT, Aug 5 (Reuters) – General Motors has renewed its joint venture with China’s SAIC Motor Corp for another 20 years, enabling the U.S. automaker to use China as an export hub amid rising competition from Chinese brands in and outside their home market.
The extension announced on Tuesday, following GM’s lengthy restructuring in China that included plant closures and the elimination of some models, marks its response to growing pressure from Chinese automakers like BYD in China and major overseas markets.
It also underscored the challenges for the U.S. automaker to entirely wean itself from reliance on China for revenue, low-cost manufacturing and technology know-how even as geopolitical tensions persist.
MORE DEVELOPMENT WORK TO BE DONE IN CHINA
The U.S. automaker said on Tuesday the extended 50-50 joint venture will result in more vehicle-development work being done in the world’s largest auto market to appeal to local tastes.
The terms will also allow GM to ship Buicks and Cadillacs from China to the Middle East, Africa, South America, Mexico and elsewhere in Asia, starting with the exports of the China-developed Buick Electra series later this year, the Detroit automaker said.
SAIC said in a separate statement that the renewed partnership would allow China’s “local innovation to be shared globally”.
“With China’s R&D and market serving as the vanguard to feed back into and empower GM’s other global markets, SAIC-GM sets a benchmark for other joint ventures between Chinese and foreign automakers,” said Lei Xing, a U.S.-based independent auto analyst.
GM was one of the first global automakers to enter China when it won a coveted partnership with SAIC in 1997, and grew to become one of the country’s top-selling carmakers.
But its 2025 sales in China dropped to less than half of their 2017 peak of over 4 million vehicles. Buick, Chevrolet and Cadillac models are outsold by homegrown Chinese brands led by BYD due to a limited lineup of competitive electric vehicles.
GM TO HALT CHEVROLET SALES IN CHINA
Under the new agreement, GM will focus on its Cadillac and Buick brands in China while discontinuing Chevrolet sales in the country. The Chevrolet lineup will still be produced and exported through GM’s separate joint venture with SAIC and Wuling.
SAIC-GM, which plans to launch at least 30 electric or hybrid vehicles by 2030, has pivoted to compete with a portfolio of locally developed products by launching the Buick Electra series last year, with advanced powertrain and intelligent features absent in its U.S.-designed vehicles.
The Electra E7 SUV had more than 10,000 sales in its first month on the market. It will be the first premium model that the joint venture will sell overseas, starting in October.
The joint-venture automaker has no plans to export to the United States, GM said. Tariffs and national security policies aimed at China-developed technology have kept Chinese automakers out of the U.S. market.
GM in 2024 began restructuring its China business amid steep market-share losses. It recorded two non-cash charges totaling more than $5 billion on its joint venture in China.
The company began losing money in China earlier this decade, having once logged around $2 billion in annual profits. Since the restructuring, GM has posted several consecutive quarters of profit.
The joint-venture renewal follows a trend among automakers, including Honda Motor Co and Volkswagen AG, to renew partnerships with Chinese firms despite significant losses in market share and profits in China.
(Reporting by Kalea Hall in Detroit, Zhang Yan in Shanghai and Qiaoyi Li in Beijing; Editing by Jamie Freed, Stephen Coates and Jan Harvey)
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