According to the China Automobile Dealers Association, China, the world’s largest auto market, would suffer greatly in terms of sales and post the first negative result in at least 17 years if the stock market reaches bear status.
If the current equity turmoil continues vehicle sales would plunge, while soaring just one to two percent this year if the stock market levels and the economy enters turnaround mode, commented Luo Lei, deputy secretary-general of the industry trade group. “A stock market plunge hurts consumer confidence,” Luo told Bloomberg on Friday. “People wouldn’t want to spend on cars when the market keeps on declining. Dealers are sacrificing their margins and giving out big incentives to help attract buyers.” China’s economy has been predicted to surge at the lowest level in more than two decades, even though there’s no recession, with global automakers now worried of their sliding fortunes.
Carmakers had gotten used to the double-digit percentage growth in China, which averaged 17 percent during the past decade and are now restating their forecasts. Earlier the consensus view was the new vehicle market would surge at the same pace as the country’s GDP, but now certain makers are even wearier and offer a pessimistic view on their full-year goals as demand is still dropping faster than expected. Among the manufacturers that have already showcased their full year guidance figures, Ford even went on to say the market would have a negative outcome this year. Audi and Volkswagen lowered their global sales targets because of the Chinese market’s situation and PSA Peugeot Citroen and Mazda also warned of upcoming pricing wars between automakers in search of soaring sales.