11:36 AM EST, 12/04/2024 (MT Newswires) -- General Motors ( GM ) said Wednesday that it expects a more than $5 billion profit hit amid competitive market conditions in China that will require restructuring operations in the country.

The automaker expects to record an impairment charge of $2.6 billion to $2.9 billion in the three months ending Dec. 31, related to its equity interest in its Chinese joint ventures.

GM's audit committee determined that an impairment was required to reflect a "material loss in value" of the company's investments in certain Chinese joint ventures, the automaker said in a Securities and Exchange Commission filing. SAIC General Motors Corp., in which GM owns a stake, is finalizing restructuring actions to address market challenges and competitive conditions.

GM expects SAIC's restructuring plan to result in additional equity losses of $2.7 billion, the majority of which is expected to be recorded in the December quarter. The turnaround will include plant closures and portfolio optimization, according to the filing.

Shares of GM fell 1% in Wednesday trade.

In October, GM lifted the midpoint of its 2024 adjusted earnings before interest and taxes guidance to $14.5 billion from a prior $14 billion. At the time, it narrowed its adjusted earnings per share outlook to between $10 and $10.50 from a prior range of $9.50 to $10.50.

Earlier this week, GM announced that it was selling its stake in the nearly completed Ultium Cells battery cell plant in Michigan while maintaining its ownership stake in Ultium Cells LLC. The move will help GM grow with the electric vehicle market in a "capital efficient manner," GM Chief Financial Officer Paul Jacobson said in a statement at the time.

UBS Securities said in a note that the decision likely reflected an effort to improve capital efficiency and potentially signals cooling EV demand.

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