GM says it is committed to China operations despite challenges from Reuters

(Reuters) – General Motors said on Thursday it was committed to building a profitable and self-sustaining operation in China, despite facing stiff competition from local brands.

GM shares rose more than 4%.

“We’re committed to keeping the cash stable there to a point where it’s self-sustaining. That means we don’t need any outside capital,” GM Chief Financial Officer Paul Jacobson told an auto conference organized by JP Morgan .

Global automakers have struggled to make inroads in China as local manufacturers continue to roll out affordable models packed with features.

GM is also facing increased investor scrutiny over its China operations, which over the past decade have gone from being a profit driver to a drain on the company’s finances.

The Detroit-based automaker said last month it would work with its joint venture partner in China to restructure its business and plans to cut spending there.

Jacobson said Thursday that GM’s China operations could be a good asset, but reiterated the need for some restructuring.

“I don’t necessarily buy the idea that we’re struggling to make money there,” Jacobson said.

A leading auto analyst also called in June for the Detroit Three to pull out of China to save money to spend on expensive electric vehicle production.

GM posted a $104 million loss in China in the second quarter, a disappointment after executives said they expected a profit in the region.