Traditionally China is one of the largest sources of revenue for the automotive industry worldwide. The rapid pace of economic growth allowed citizens to invest more and more in new cars. For automotive companies, such as General Motors and Volkswagen, sales in China bring much more revenue than those in the US or Europe.
The Chinese market, however, has experienced difficulties this year from the loss of momentum of the world economy and the growing trade war between Washington and Beijing.
German concern Volkswagen said on Tuesday that the company’s sales in the Asian country fell by nearly 11% last month. A day earlier, General Motors announced a 15% drop of sales in China for the third quarter of 2018, and Jaguar Land Rover stopped working in one of its factories in the UK for two weeks after the company’s sales in the Asian country fell by 46% in September. Ford sales have been down for months.
Car sales in China fall in July and August, according to data from the Association of Automobile Manufacturers in the country.
The trade war with the United States has led to general consumer insecurity and consequently to an unwillingness to buy cars.
The foreign companies also appear to be one of the main reasons for sharp falls. The sales of US cars have increased by 20% in August this year compared to the same month of 2017, more than twice of their Chinese competitors, according to data from the Automobile Manufacturers Association.
Some international manufacturers are facing problems because of their models. Companies like Jaguar Land Rover and General Motors are known in China with their big cars that have a high fuel consumption, making them less demanding in view of rising fuel prices.