GM Faced a $29 Million Fine by China!
The global automobile industry always has a bunch of stuff going on. Among the most hyped news was the one a while back. Remember General Motors? Yes, the infamous American car manufacturer. It got charged a $29 million fine by China. Although the American automaker mints money, a $29 million figure is still enough to shake the company.
The Accusation
It was back in December that China accused General Motors of monopolistic price fixing, and therefore called for the staggering fine. The charges were called by Shanghai’s price regulator. The charge stated that General Motors, coupled with one of the local partners—SAIC—has deliberately brought down the price of several automobiles including a few models of Buick and Chevrolet, as well as of Cadillac.
The American giant handled the situation in a perfectly decent manner, assuring its respect for the local laws of wherever the company operates. It further went on to assure that it will be looking into the matter and will certainly be taking the measures needed to solve the matter.
Authorities in Shanghai elaborated on the issue and said that both the companies teamed up to exploit the dealers in manipulating the prices of their GM vehicles. The authorities revealed that General Motors threatened to halt the deliveries of the dealers who refused or failed to confirm.
The Current Situation
General Motors, taking into consideration its position in China, cannot back out. It will either pay the fine or find a way around. China is the most lucrative market for the American giant. Figures show that it does more prolific business there in comparison to what it does in the United States. In 2016, it managed to elevate its sales by over 8.5% than the previous year—2015. By November 2016, the company had already sold around 3.4 million units in China also accounts for over one-third of the GM’s global unit sales.
US-China Relations
These charges are also very crucial as both the countries, the USA and China, are trying to better their relations with each other. The situation was quite delicate as China was also expected to retaliate against the newly empowered US-President’s actions.
There have been several other fines as well as the Chinese automobile market posed by China. The previous culprits to GM included Volkswagen, Nissan, and Audi among a few others. This essentially points to the fact that China tends to enforce strict policies regarding business in the country.
This also brings up the discussion of why General Motors went on to make such a crooked mistake despite the delicate relations of both the countries and the previous examples of some major German auto manufacturers.
Are you looking forward to revamping a GM car? Do that by simply replacing its engine. EngineWorld is the best place to get your replacement engines. We import USDM compatible used transmissions and engines from Japan and offer them in top-notch conditions. Get one for your car by dialing (800) 903-4430.
Sources
http://www.investors.com/news/china-fines-gm-29-million-for-price-fixing/
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