(Reuters) – General Motors said on Thursday it was committed to building a profitable and self-sustainable operation in China, despite facing stiff competition from local brands.
Shares of GM rose more than 4%.
“We’re committed to maintaining cash stability there at a point where it’s self-sustaining. That means not needing any capital from outside,” GM CFO Paul Jacobson said at an auto conference organized by J.P. Morgan.
Global automakers have struggled to make headway in China as local manufacturers continue to release feature-packed affordable models.
GM has also been facing increasing investor scrutiny on its China operation, which in the past decade has shifted from being a profit engine to a drain on the company’s finances.
The Detroit automaker said last month that it would work with its joint-venture partner in China to restructure its business and that it planned to cut spending there.
Jacobson on Thursday said that GM operations in China could be a good asset but reaffirmed the need for some restructuring.
“I don’t necessarily accept the notion that we’re struggling to make money there,” Jacobson said.
A leading automotive analyst in June also called on the Detroit Three to withdraw from China to save cash to spend on costly EV production.
GM recorded a $104 million loss in China during the second quarter, a disappointment after executives said they expected to be profitable in the region.
Reporting by Nathan Gomes in Bengaluru and Ben Klayman in Detroit; Editing by Anil D’Silva
