At A Crossroads: China Faces Crisis In Car Market For First Time Since 1990s

Passenger vehicles sales through dealership has been low for the past three months in China, which is known as a stable market for automobile sales. Thanks to the US-China trade war, the industry probably faces the first crisis since the 90s.

The economic slowdown has left the industry struggling. With some consumers avoiding the showrooms as several brands have warned about lower profits, has forced Jaguar Land Rover to shut its factory temporarily, Bloomberg reported. US President Donald Trump imposed a further 10 per cent duty on Chinese imports, and has said that the rate will go up to 25 per cent in 2019.

Association of Automobile Manufacturers of China has said that car purchases by dealers have come down by 12 per cent. The only thing that will save the drowning industry is a boost in sales. In order to do that, companies will have to reduce the prices, shut factories temporarily and lower costs that can be an unnecessary burden.

Since foreign companies are allowed to own a majority of stakes in the automobile industry, BMW signed a USD 3.1 billion deal to establish control over its joint venture. All major car-makers such as General Motors Co, Volkswagen AG and Honda Motor Co. have reported a dip in deliveries.