Managing The Dragon

Vehicle sales in China slumped for the 12th consecutive month in June, with unit sales of passenger cars and commercial vehicles declining by 9.6 percent in the month, and 12.4 percent for the first six months of the year. With the exception of electric vehicles (“EVs”), which increased by 80 percent in June and 49.6 percent year to date, all other categories of cars, trucks, and buses registered declines. The continuing, unprecedented — and double-digit — drop in auto sales has industry observers stumped, begging the question: When will it end?

The Trump Administration’s tariff strategy begs the question as to who actually pays for these duties. Does the American consumer pay through higher prices and efficiency losses caused by disruptions in the global supply chain as Liberty Street Economics argues in a recent article?

China’s vehicle sales declined for the 10th month in a row in March and fell by double digits during the first three months of the year. Despite this gloomy performance, however, encouraging signs are providing hope that the worst may be over for China autos. After slowing throughout 2018, China’s economy has responded to recent […]

For the first time in memory, China’s unit vehicle sales declined in 2018, registering a 2.8 percent year over year decline.

Tesla’s experience in China so far has actually been quite good.

In 2016, almost 95 million autos were made and sold globally, nearly all powered by an internal combustion engine (ICE). For the past 100 years, internal combustion engine (ICE) powered vehicles, and readily available oil supplies have dominated autos. The winds of change are blowing, however, and many believe that the $2.0 trillion global auto industry is about to undergo a significant transformation as all-electric vehicles (EVs) begin to replace ICE vehicles.

2016 turned out surprisingly well for China’s automakers. Among other factors, auto sales benefitted from the cut in the purchase tax on small cars initiated by the Chinese government in the final quarter of 2015 to boost flagging demand. The resulting surge in sales carried over into 2016, and when rumors surfaced later in the […]

What a difference twenty years makes. In 1993, China’s auto industry was producing less than one million vehicles per year and there were no Chinese passenger car makers. In 2013 China will produce over twenty million vehicles, and Chinese companies account for 35 percent of the total passenger car market. In 1993 the likes of […]

At the start of 2008, the two key numbers in China’s auto industry were 10 million and 1 million. With sales of both passenger cars and commercial vehicles (trucks and buses) growing at 20 percent or more in the first few months of the year, it seemed all but certain that China’s auto industry would […]