The Silver Lining in GM's Big China Problem
Rewind to about 15 years ago, and China was the holy grail for automakers. Its market was beginning to boom, and foreign automakers paired up with joint ventures to begin selling vehicles in hopes the region would become another profit machine.
In fact, looking at how dire things are today (more on this in a second), it's hard to believe General Motors (NYSE: GM) sold more vehicles in China than it did the U.S. from 2010 until 2023. But after a nearly decade-long slide in profits and market share, and blossoming domestic brands, China is now a big problem for investors. However, some recent data gave a silver lining.
To make a fairly well-known story short, the Chinese government heavily subsidized the electric vehicle (EV) industry. The strategy worked, and maybe worked too well. Now there's an entire domestic market of advanced and highly affordable Chinese EVs that have flooded the industry and created a brutal price war.
Source Fool.com
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