On April 6, 2005, in Haikou City, Hainan Province, China, employees on the assembly line of China FAW Group Haima Automobile Co., Ltd. were producing Mazda’s “Family” series of cars.
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Detroit – Traditional Detroit Automaker – General Motors, Ford and Strantis Bank of America’s chief auto analyst said on Tuesday that it should exit the Chinese market “as soon as possible”.
The warning from BofA Securities research analyst John Murphy comes as China, the world’s largest auto market, faces unprecedented competition and is dramatically ramping up vehicle production to meet demand from Chinese consumers and global exports.
Murphy, who has previously approached GM about exiting the market, said the “D3” automaker needs to focus on its core products and more profitable regions.
“I think you have to see D3 exit China as soon as possible,” he said Tuesday while discussing Bank of America’s annual “Auto Wars” report at an Automotive Press Association event in suburban Detroit. “China is no longer central to General Motors, Ford or Stratis,” he said.
Just a few years ago, this prospect would have been unthinkable for automakers, especially General Motors, but the rise of China’s homegrown automakers, e.g. BYD and auspicious This has brought increasing pressure on enterprises.
GM’s market share in China, including its joint ventures, has plummeted from about 15% in 2015 to 8.6% last year, the first time it fell below 9% since 2003. %.
GM executives say they believe they can turn around operations and regain market share in China, largely with the help of new electric vehicles.
U.S. companies operating in China also face geopolitical risks and uncertainties. President Joe Biden announced last month that his administration would quadruple tariffs on Chinese-made electric vehicles.
Murphy said that while Detroit automakers need to rethink how they do business in China, the story is slightly different for the U.S. electric vehicle leader Tesla.
Murphy said that, like Chinese companies, Tesla has a cost advantage of about $17,000 over traditional Detroit automakers in electric vehicle parts to assist its development in the Chinese market and give it “more room to operate.” .
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