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China charges weigh on General Motors but profit and revenue top expectations

Last month the vehicle manufacturing giant warned that the poor performance of its Chinese joint ventures would force it to write down assets.

By contributor By Michelle Chapman, Associated Press
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A 2024 Chevolet Silverado 2500 HD Custom truck on display at the Pittsburgh International Auto Show
Chevrolet maker General Motors swung to a loss in the fourth quarter on huge charges related to China, but still topped profit and revenue expectations (Gene J Puskar/AP)

General Motors swung to a loss in the fourth quarter on huge charges related to China, but still topped profit and revenue expectations.

Last month the vehicle manufacturing giant warned that the poor performance of its Chinese joint ventures would force it to write down assets and take a restructuring charge totalling more than 5 billion US dollars (£4 billion) in the fourth quarter.

China has become an increasingly difficult market for foreign car makers, with BYD and other domestic companies raising the quality of their vehicles and reducing costs. The country has subsidised its vehicle manufacturers.

GM is best known for manufacturing four brands – Buick, Cadillac, GMC and Chevrolet.

For the three months to December 31, the company lost 2.96 billion dollars (£2.37 billion), or 1.64 dollars (131p) per share. A year earlier it earned 2.1 billion dollars (£1.7 billion), or 1.59 dollars (127p) per share.

Stripping out the charges and other items, GM earned 1.92 dollars (154p) per share in the quarter. That topped the 1.85 dollars (148p) per share that analysts surveyed by FactSet predicted.

Revenue climbed to 47.7 billion dollars (£38.2 billion) from 42.98 billion dollars (£34.45 billion), beating Wall Street’s estimate of 44.98 billion dollars (£36.05 billion).

In a letter to shareholders, chief executive Mary Barra said GM doubled its electric vehicle (EV) market share over the course of 2024 as it scaled production.

She noted that China had positive equity income in the fourth quarter before restructuring costs and that GM is taking steps with its partner to improve from there.

Ms Barra acknowledged there is uncertainty over trade, tax, and environmental regulations in the United States and said GM has been proactive with Congress and the administration of President Donald Trump.

“In our conversations, we have stressed the importance of a strong manufacturing sector and American leadership in advanced technologies,” she said. “It’s clear that we share a lot of common ground, and we appreciate the dialogue.”

This year, GM will offer three new Cadillac EVs, the Escalade IQ, Optiq and Vistiq.

Ms Barra said the company will also see the full-year impact of new petrol-fuelled SUVs launched in 2024, including the Chevrolet Equinox, Chevrolet Traverse and GMC Acadia.

She noted that, regardless of what happens in the US, GM has “a broad and deep portfolio of ICE (internal combustion engine) vehicles and EVs that are both growing market share, and we’ll be agile and execute as efficiently as possible”.

Looking ahead, GM anticipates 2025 adjusted earnings in a range of 11-12 dollars per share (882p-962p).

Analysts surveyed by FactSet are calling for full-year earnings of 10.86 dollars (871p) per share.

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