China isn’t coincidentally looking at the U.S.’s largest automaker because of a certain someone trying to destroy the current One-China Policy. Other big American brands that have broken through China’s gates aren’t on the chopping block.
GM China Venture Said to Be Under Government Anti-Trust Probe
December 14, 2016
General Motors Co.’s joint venture in China with SAIC Motor Corp. is being investigated by the Chinese government for possible antitrust violations, according to people familiar with the matter.
Any action by the National Development and Reform Commission, which is conducting the probe, may be subject to changes, said the people, who asked not to be identified because the information is private. Some dealerships in the SAIC-GM network were investigated over retail pricing practices, one of the people said. GM’s shares fell 2.3 percent to $36.51 at 11:58 a.m. in New York.
GM fully respects local laws and regulations wherever it operates and doesn’t comment on speculation, Irene Shen, a company spokeswoman, said in an e-mail. The NDRC didn’t immediately reply to a fax seeking comment and representatives for SAIC and the SAIC-GM joint venture weren’t immediately reachable for comment.
The probe, which the people said was triggered by antitrust concerns, comes amid strained China-U.S. relations. A Communist Party newspaper last month said a “tit for tat” retaliation could follow proposals by U.S. President-elect Donald Trump for tariffs on the world’s largest trading nation, which had $627 billion in U.S. trade in 2015. The Global Times wrote in an editorial that orders for Boeing Co. planes could be replaced with models from Airbus Group SE, and that Apple Inc.’s iPhone sales may suffer a setback.
Trump said in a “Fox News Sunday” interview that aired this week the One-China policy regarding Taiwan will hinge on cutting a better deal on trade. He told a crowd in Iowa last week that China would soon have to “play by the rules.”
Retail sales by GM in China rose 8.6 percent this year through October to 3.06 million vehicles, trailing only Volkswagen AG among foreign automakers. Its German rival boosted deliveries 11 percent to 3.2 million.
The China Daily reported earlier Wednesday that the government would soon penalize a U.S. automaker for price fixing, citing an interview with Zhang Handong, director of the NDRC’s price supervision bureau. The report didn’t name the automaker or the size of the penalty.
Last year, China fined Daimler AG’s Mercedes-Benz unit $56 million for monopolistic pricing practices. In 2014, they fined Volkswagen AG and Fiat Chrysler Automobiles NV for similar practices as well as a dozen parts makers. The parts firms were fined $200 million collectively.
— With assistance by Tian Ying, and Steven Yang