The company allegedly punished dealers who didn't follow the rules.
General Motors’ joint venture with the Shanghai Automotive Industries Corp (SAIC) in China will incur a fine of 201 million Yuan ($29 million at current rates) from the National Development Reform Commission for allegedly punishing dealers for selling models at prices lower than an amount set by the automaker. The pricing regulator believes this is monopolistic activity, and the penalty equates to four percent of the company’s annual sales there, according to Shanghai Daily.
GM and SAIC operate Shanghai GM in China a 50-50 joint venture. According to these allegations, the company set minimum prices on models like the Cadillac SRX, Chevrolet Trax, and Buick Excelle (above). The automaker reportedly monitored dealer’s sales and threatened to deduct the showroom’s cut for selling a vehicle too inexpensively, according to Shanghai Daily.
“GM fully respects local laws and regulations wherever we operate,” the automaker said in a statement. “We will provide full support to our joint venture in China to ensure that all responsive and appropriate actions are taken with respect to this matter.”
China is one of the most important regions for General Motors’ success, and it’s even catching up with the United States. As of November, GM’s deliveries are 8.5 percent higher than in the first 11 months of 2015. Cadillac’s sales are 103,004 vehicles in the region in the same period, which tops 100,000 for the brand for first time ever in China.
GM will continue to focus on China in the future. Next year, the company will add the Chevrolet Silverado and Colorado to its lineup there. They will be built in the U.S., and the company will import them to certain cities where the government will still allow pickup truck sales.