For­eign au­tomak­ers face sup­ply glut

China Daily (Canada) - - FRONT PAGE -

For­eign au­tomak­ers in China may strug­gle to dic­tate sales tar­gets in the fu­ture after deal­ers com­plained to the gov­ern­ment that in­flex­i­ble tar­gets set dur­ing a mar­ket boom obliged them to buy too much stock and bear the brunt of a drop in de­mand.

Au­tomak­ers largely stuck to tar­gets through­out 2014, sell­ing cars to deal­ers on sched­ule. But deal­ers slashed re­tail prices and booked losses as sales growth in the world’s big­gest auto mar­ket halved from the pre­vi­ous per­cent.

“Car­mak­ers have high mar­ket ex­pec­ta­tions. But the re­al­ity is: sup­ply ex­ceeds de­mand,” said Luo Lei, deputy sec­re­tary­gen­eral of the China Au­to­mo­bile Deal­ers As­so­ci­a­tion.

The re­port from China’s big­gest dealer body could help change the bal­ance of power at a time when au­tomak­ers are start­ing to al­ter ex­pec­ta­tions in an econ­omy grow­ing near its slow­est rate in 24 years.

year’s 14

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