In the 1950s, a former GM president reportedly observed that “what’s good for General Motors is good for the US”. Charles Erwin Wilson was in fact misquoted, but 60 years later it would appear that what is really good for GM is the China market.
In the first quarter of this year, GM’s China joint ventures reported net income of $595m, compared with just $100m for the company’s global operations.
While GM’s quarterly results were affected by a $1.3bn charge for its recall crisis and another $400m loss related to its Venezuelan operations, China has for years been an extremely lucrative market for the US company. The country accounted for 35 per cent of GM’s global vehicle sales in 2013, yet the $3.7bn in net income reported by its China joint ventures came close to exceeding the $3.8bn in overall net income attributable to shareholders.