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General Motors is to write down the value of its businesses in China by more than $5bn, laying bare the slowdown in what was once the US carmaker’s largest market.
On Wednesday, GM said that there was a “material loss in value of our investments in certain of the China joint ventures . . . in light of the finalisation of a new business forecast and certain restructuring actions”.
GM and Germany’s Volkswagen are two of the largest western carmakers operating in China. But like many rivals, both are struggling to maintain their position amid rising competition from local manufacturers.
Problems in China have also recently led to steep falls in quarterly profit for Toyota, Honda and BMW.
GM runs a series of joint ventures in the country alongside SAIC Motor Corp.
The company said on Wednesday that it would write down the value of its interest in its Chinese joint ventures by as much as $2.9bn, and record an additional $2.7bn in restructuring charges.
GM shares were down 0.7 per cent in pre-market trading on Wednesday, having fallen 2.5 per cent in the previous session.
Earlier this month, VW also announced that it has sold its plant in Xinjiang following scrutiny over its presence in a region of China where Beijing has been accused of widespread human rights abuse.
This is a developing story
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