Public backlash will hurt U.S. automakers more than expected fines in a price-fixing probe in China, an automotive analyst said Thursday, speaking on long-running investigation in the world's top vehicle market that appears near to a conclusion.
"The monetary (penalty) is small (for large automakers). Bigger than that is the public relations effect of being dragged before the media (for example before) China television or the China Daily newspaper. Those do have a tangible effect on sales," IHS Markit managing director, James Chao, told CNBC's "Squawk Box".
A senior Chinese state planning official told China Daily newspaper on Wednesday the government could soon slap a penalty on at least one unnamed U.S. automaker for monopolistic behavior.
The automobile price probes have run for years, but the statement to the state-run newspaper prompted speculation that China has seen an indirect way to respond to President-elect Donald Trump. He campaigned on remedying a wide trade gap currently in favor of Beijing, including keeping auto manufacturing jobs in the United States.
He has also angered China by taking a congratulatory phone call from Taiwan President Tsai Ing-wen and calling into question the foundations of the "One China" policy.
Shares of U.S. automakers General Motors and Ford Motor, which have major sales and manufacturing operations in China, skidded on Wednesday after the news.
China is crucial to GM. Chinese consumers bought more than one-third of the 9.96 million vehicles GM sold globally in 2015. Profits from Chinese operations, including joint ventures, accounted for about 20 percent of GM's global net income of $9.7 billion in 2015.
Ford's China joint ventures represented about 16 percent of its global pretax profit of $9.4 billion in 2015.
It would not be the first time Chinese regulators have punished foreign automakers. In 2014, the commission slapped multi-million-dollar fines on German and Japanese companies.
The Japanese automakers paid their penalties, fixed their processes and they have "done just fine" since then but "what happens in the media in China does matter a lot," said Chao.
-Reuters contributed to this article.