General Motors' profits in Asia plummeted in the first quarter, but the first hints of a rebound are starting to become visible in China, the automaker's most important Asian market, company executives and analysts said on Tuesday.
Automakers post profits based on their sales to independent dealers, not the dealers' sales to the public. GM cut its shipments to dealers in China by half in January and February, mostly blaming inventories of unsold cars that swelled as the government tried to slow the economy to a more sustainable pace.
But the number of vehicles that GM ships to dealers recovered last month, rising 12 percent from a year earlier, according to company figures released late on Tuesday. Retail sales by dealers have also been strong lately, climbing 11 percent in March.
PHOTO: GM/THE NEW YORK TIMES
"There's a mix issue; we didn't sell as many Buicks" in the first quarter, said Troy Clarke, a group vice president of GM and president of its Asian operations.
He added, however: "This is not an unexpected shift. Our operations are profitable."
The Chinese market is becoming more competitive for GM, which has 10 percent of the market, the second-largest share after Volkswagen.
Toyota, Honda, Nissan and Hyundai are expanding quickly in China. The Ford Motor Co., which was slow to enter the Chinese market in the 1990s, is now racing to catch up as well.
As part of its earnings announcement in the US on Tuesday, GM said that its Asian operations posted a profit of US$60 million in the first quarter of this year. That was down from US$275 million a year earlier, a decline GM attributed mainly to lower earnings in China and Japan.
GM's performance in China is important as the company struggles to reverse losses in its North American vehicle operations and tries to persuade credit rating agencies not to downgrade its debt to junk status.
The Detroit-based company reported a US$1.1 billion first-quarter loss on Tuesday that it blamed on a stark turnaround in its North American operations. It also said it was no longer certain enough of its outlook to provide earnings guidance for the full year.
"The results at GM North America were clearly disappointing," Rick Wagoner, GM chairman and chief executive, said in a statement on Tuesday. "We have well thought-out plans to address GMNA's poor performance, starting with aggressive product introductions this year, value-focused marketing initiatives and further reductions in our cost structure."
The loss was in line with GM's profit warning of last month that sent the company's shares to a 12-year low and led to a shakeup of its North American management.
GM's US$1.1 billion net loss was all the more stark in comparison with a US$1.2 billion net profit in the first quarter of last year.
Special items included charges for restructuring the company's troubled European operations and accelerated retirement packages offered to US white collar workers. The company's share of the North American market fell to 25.2 percent from 26.3 percent a year ago.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique