According to foreign media reports, Bank of America Securities analyst John Murphy said on June 18 that traditional American automakers such as Ford and General Motors should withdraw from the Chinese market in order to preserve capital during the transformation of costly electric vehicles.
“I think you will see (the Detroit Big Three) exiting China as quickly as possible,” Murphy said in his annual Car Wars report.
Murphy’s “Car Wars” is a report that has attracted much industry attention.
, Murphy believes that in the process of competing with electric vehicle manufacturers such as Tesla and Chinese automakers, Detroit’s three major car companies must come up with effective cost-cutting measures to maintain their competitiveness.
Image source: Stellantis, In response to lower-than-expected electric vehicle sales, Ford, General Motors and Jeep parent company Stellantis have focused on cutting costs in all business areas.
Murphy warned that the three companies are likely to have to take more stringent measures to cut costs, especially in the gasoline-powered vehicle business, which is now a major source of profits.
, Murphy said at an event in Detroit: “Car companies need to be very proactive in managing their core businesses, which is really a strong medicine.
In this regard, automobile companies still have a lot of very hard work to do.
“, As the world’s largest auto market, China is full of challenges for many foreign auto companies, especially in recent years.
Murphy and other analysts have pointed out that it is difficult for foreign car companies to overcome the advantages of local Chinese car companies.
Murphy said that Chinese consumers are highly loyal to local brands and may become even higher after the United States imposes tariffs of more than 100% on imported electric vehicles from China starting August 1.
Sales of Ford and General Motors in China have been declining over the past decade.
China was once GM’s largest market, but the company is currently struggling to maintain profitability in China.
Ford is also feeling fierce competition from local car companies such as BYD and Geely, and is currently transforming its China operations into an export center.
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