GM renews China venture with SAIC for 20 years after restructuring

The extension announced following GM's lengthy restructuring in China that included plant closures and the elimination of some models, marks its response to growing pressure from Chinese automakers like BYD in China and major overseas markets, Reuters reports.

It also ​underscored the challenges for the US automaker to entirely wean itself from reliance on China for revenue, low-cost manufacturing and technology know-how ​even as geopolitical tensions persist.

The US automaker said last week the extended 50-50 ⁠joint venture will result in more vehicle-development work being done in the world's largest auto market to appeal to local tastes.

The terms will also allow ​GM to ship Buicks and Cadillacs from China to the Middle East, Africa, South America, Mexico and elsewhere in Asia, starting with the exports of the China-developed ​Buick Electra series later this year, GM states.

SAIC says in a separate statement that the renewed partnership would allow China's "local innovation to be shared globally".

"With China's R&D and market serving as the vanguard to feed back into and empower GM's other global markets, SAIC-GM sets a benchmark for other joint ventures between Chinese and foreign automakers," ​Lei Xing, a US-based independent auto analyst claims.

GM was one of the first global automakers to enter China when it won a coveted partnership with SAIC ​in 1997, and grew to become one of the country's top-selling carmakers.

But its 2025 sales in China dropped to less than half of their 2017 peak of over ‌4 million ⁠vehicles. Buick, Chevrolet and Cadillac models are outsold by homegrown Chinese brands led by BYD due to a limited lineup of competitive electric vehicles.

Under the new agreement, GM will focus on its Cadillac and Buick brands in China while discontinuing Chevrolet sales in the country. The Chevrolet lineup will still be produced and exported through GM's separate joint venture with SAIC and Wuling.

SAIC-GM, which plans to launch at least 30 electric or ​hybrid vehicles by 2030, has pivoted to ​compete with a portfolio of locally ⁠developed products by launching the Buick Electra series last year, with advanced powertrain and intelligent features absent in its US-designed vehicles, according to the Reuters report.

The Electra E7 SUV had more than 10 000 sales in its first month on the market. It will ​be the first premium model that the joint venture will sell overseas, starting in October.

The joint-venture automaker has no ​plans to export ⁠to the United States, GM claims. Tariffs and national security policies aimed at China-developed technology have kept Chinese automakers out of the US market.

GM in 2024 began restructuring its China business amid steep market-share losses. It recorded two non-cash charges totalling more than $5 billion on its joint venture in China.

The company began losing money in China ⁠earlier this ​decade, having once logged around $2 billion in annual profits. Since the restructuring, GM has posted ​several consecutive quarters of profit.

The joint-venture renewal follows a trend among automakers, including Honda Motor Co and Volkswagen AG , to renew partnerships with Chinese firms despite significant losses in market share and ​profits in China.