U.S. Automakers Consider Options if China Tightens Regulations

U.S. automakers consider options if China tightens regulations

In a global economy, few hard consumer goods are more global than automobiles. With emerging markets in the two most populous countries on the planet, automakers from across the globe are looking at China and India with hope and optimism … but they have to get in while the getting is good and grab a piece of the market before it’s further saturated by domestic players.

In China, that’s often easier said than done. Just ask Apple. And now it’s the U.S. automakers’ turn to run the gauntlet of Chinese regulations, which can change seemingly overnight. It’s a different sort of public relations program. Trying to appeal to a customer base in a way that makes it profitable, while also assuring the government your business will not infringe on their own goals and interests.

It appears at least one U.S. automaker ran rather afoul of the regulators. Both Chinese and American media are reporting that at least one American automaker will soon be on the receiving end of a stiff fine for what has been called “monopolistic behavior.” The company in question? Bloomberg News claims it’s General Motors (GM), but there’s been no independent confirmation of this.

The reason for the fine is also sketchy. CNN and other media have speculated that it might be similar to the massive fines for “price fixing” that other international automakers have been hit with in the recent past.

If this is true, it could put a damper on GM’s success in China, which has been significant for several years now. Looking at 2016 alone, GM has sold more than 3 million cars in China just through November, an increase of more than 8 percent over the same period in 2015. Perhaps a more surprising metric for some Americans, GM sells more cars in the China that it does in the States.

And they are not alone. Ford’s been on a tear in China lately too, giving the two top U.S. automakers another hemisphere in which to battle it out for market supremacy. Ford sales are up too, but they would have to triple sales to catch GM this year.

So, all this works out in a three-way battle. U.S. automakers must keep the Chinese government happy, produce a product the Chinese people want to buy and do it all in a way that causes those consumers to buy their brand over the Other Guy. A complicated international PR dance that is only just beginning.

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