Photo: SAIC-GM
In the People’s Republic of China, the world’s largest economy by nominal GDP and America’s largest creditor, General Motors builds and sells cars through a joint venture with SAIC Motor. They’re at it since the two parties proposed to collaborate in 1995, and business is booming as of December 2016. But the thing is, SAIC-GM doesn’t always play by the rules of engagement.
As per Automotive News, the joint venture between SAIC and GM is to pay 201 million yuan to the Chinese government because the joint venture has been using monopolistic pricing practices. In U.S. dollars, that amount works out at $29 million, otherwise known as a tremendous stack of dollar bills.
On Chinese state television, the pricing regulator in Shanghai condemned SAIC-GM for setting minimum prices on certain Cadillac, Buick, and Chevrolet models. SAIC hasn’t responded to the allegation, although the U.S. arm of General Motors responded as follows:
"GM fully respects local laws and regulations wherever we operate,” said a press officer. “We will provide full support to our joint venture in China to ensure that all responsive and appropriate actions are taken with respect to this matter." Reading between the lines, with emphasis on the selection of words, it appears that this is news for the American arm of General Motors.
On that note, the 201 million yuan fine for SAIC-GM comes nine days after a Chinese official from the National Development Reform Commission told the local media that a penalty is in the offing for a U.S.-based automaker with monopolistic behavior. This, in turn, saw General Motors and Ford Motor Company shares take a dive.
GM's and FoMoCo's stock market slip was made worse by a nomination made by the U.S. President-elect. Two days ago, Donald Trump nominated Peter Navarro, an anti-China economist, to fill the role of White House National Trade Council chief.
Is this all a coincidence? Maybe. Maybe not.
On Chinese state television, the pricing regulator in Shanghai condemned SAIC-GM for setting minimum prices on certain Cadillac, Buick, and Chevrolet models. SAIC hasn’t responded to the allegation, although the U.S. arm of General Motors responded as follows:
"GM fully respects local laws and regulations wherever we operate,” said a press officer. “We will provide full support to our joint venture in China to ensure that all responsive and appropriate actions are taken with respect to this matter." Reading between the lines, with emphasis on the selection of words, it appears that this is news for the American arm of General Motors.
On that note, the 201 million yuan fine for SAIC-GM comes nine days after a Chinese official from the National Development Reform Commission told the local media that a penalty is in the offing for a U.S.-based automaker with monopolistic behavior. This, in turn, saw General Motors and Ford Motor Company shares take a dive.
GM's and FoMoCo's stock market slip was made worse by a nomination made by the U.S. President-elect. Two days ago, Donald Trump nominated Peter Navarro, an anti-China economist, to fill the role of White House National Trade Council chief.
Is this all a coincidence? Maybe. Maybe not.
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