When reports surfaced Tuesday night that China would impose a penalty on an unnamed American automaker, it was evident that Government Motors would be their target.
Buick is a successful line of internal combustion engine cars in China, especially among their elite.
The threat of a penalty has shares of $GM off by over -3% as we approach Wednesday’s open.
Automotive News, citing reports from the China Daily newspaper and a Bloomberg report, wrote that the Chinese government is targeting GM China.
Automotive News added that the Chinese government believes General Motors gave an order to various distributors in the country to fix prices starting in 2014.
The report comes at a strained time between the Chinese government and the U.S. following Donald Trump’s victory in the U.S. election. Trump has taken a harsh stance against China and even called to label the country a currency manipulator.
Nevertheless, China’s director of the National Development and Reform Commission’s price supervision bureau Zhang Handong was quoted as saying no one should “read anything improper” into the timing or target of the penalty.
Any headwind for General Motors is a positive for Tesla. The likihood that trade wars with China will affect the bailed out automakers is no different.
Bullish for Tesla, bearish for Lyft and GM.
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