In the world’s largest car market, uncertainty is brewing, according to The Wall Street Journal. General Motors, despite delivering 7.1% more cars last year to China, a record 3.9 million, margins there shrank in the last quarter to 7.4% from 8.6% and equity income fell 8%. Management expects significant pricing pressure ahead. Last month, Ford reported its best sales year in China and a commendable 12.8% profit margin in China, but that was down from 16% the previous year. Chinese auto sales led the globe last year, up 17%. US sales were up barely 0.5%. China’s roaring sales have in part been boosted by a government purchasing incentive. Discounts on retail prices for Chevrolets are over 15% and almost 20% on Buicks, but closer to 10% for Geely. In December, Chinese regulators slapped a $29 million fine on General Motors for manipulating prices.
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