China is the single biggest market in the world for cars, and automakers are scrambling to capitalize on the strong demand in the country. However, recent government crackdowns are dampening enthusiasm at some of them.
The latest to raise the ire of Chinese regulators is the joint venture between General Motors Company [NYSE:GM] and China's biggest automaker SAIC, which is accused of monopolistic behavior.
China plans to impose a fine of 201 million yuan (approximately $29 million) on the venture over claims it was setting minimum pricing on certain Cadillac, Chevrolet and Buick models, China Central Television, via Reuters, reported on Friday.
2016 Cadillac CT6 PHEVEnlarge Photo
“GM fully respects local laws and regulations wherever we operate,” GM 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.”
The news will be welcome relief to Ford Motor Company [NYSE:F] and Fiat Chrysler Automobiles [NYSE:FCAU] whose share price, along with that of GM, was hurt following comments made by a Chinese official on December 14 that a major American automaker would be fined for monopolistic behavior.