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Nikkei Markets

Slowdown bites China's auto industry as inventories pile up

Analysts see more downside for car sales this year after a pullback in 2018

Geely, which earlier this month gave a weaker-than-expected sales forecast for this year, is expected to be among those hurt by high stocks at dealerships.   © Reuters

HONG KONG  (Nikkei Markets)-- Shares of Geely Automobile Holdings and Great Wall Motor slumped to lead a broad decline for Chinese automakers on Tuesday as piling inventory levels and a slowing domestic economy clouded the outlook for demand in the world's largest car market.

Auto sales including passenger and commercial vehicles fell 2.8% to 28 million units last year, the first contraction in more than two decades, as Beijing phased out tax cuts on smaller cars and the Sino-American trade war helped dampen economic growth. While policy makers have signaled an intent to support the industry by subsidizing new energy vehicle purchases, increasing stocks at dealers have many worried.

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