US Car Companies Told to Abandon China

By Douglas A. McIntyre Published Jun 19, 6:40AM EDT

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US Car Companies Told to Abandon China — © Yongyuan Dai / Getty Images

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An expert warns the Big 3 U.S. automakers that they should exit China completely.

In 2010, China passed the United States as the largest car market in the world, based on unit sales. That delta has grown significantly since then. Ford, GM, and Chrysler saw China as unusually promising as American car sales plateaued in their home country. And each was remarkably successful in China for several decades. That success started to dwindle in the past several years. For example, Ford’s China sales dropped 32% between 2018 and 2022. An auto expert warns the “Big 3” to exit China completely.

BofA Securities research analyst John Murphy, a top auto analyst, told CNBC that U.S. car companies should abandon China “as soon as they possibly can.” His reasons are simple. There are dozens of local car companies in China. The electric vehicle (EV) market is growing rapidly. The Big 3 do not have EV fleets that will allow them to compete in the world’s most populous nation. Their fossil-fuel-powered cars do not have much of a future as EV adoption grows.

If Ford, GM, and Chrysler leave China, they will be trapped in smaller markets, the largest of which will be the United States. Their fossil fuel cars and the strongest Japanese manufacturers dominate America. However, if the car industry’s future is EVs, Tesla has a lead in the United States, and every large manufacturer in the world wants EV market share in the United States as well.

U.S. car companies do have European sales, but that market is dominated by local companies, led by Volkswagen, BMW, and Mercedes. U.S. manufacturers cannot look to Europe as a solution to their problems. Some countries in South America are promising. Brazil is among the largest car markets in the world. The car industry is increasing in India. Each of these nations has tremendous competition in terms of fossil-fuel-powered cars and EVs.

The future of the Big 3 worldwide is starting to look grim.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.