Lower Profit Margins Set to Foil Chinese Carmakers' Price War Plans Despite Falling Sales The Chinese car market is facing a perfect storm of challenges, with falling sales and rising costs threatening several major players.
Shrinking profit margins are now at unsustainable levels, a trend that has been exacerbated by government efforts to boost demand through purchase subsidies and tax incentives.
According to Chen Shihua, deputy secretary general of the China Association of Automobile Manufacturers (CAAM), net earnings from selling a 100,000 yuan car have plummeted to just 1,500 yuan.