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Trade War

China auto sales fall for first time in 14 months

Customers avoid GM and Ford as trade tensions rise

China has slapped Tesla and other American-built cars with a 40% import tariff since July.  (Photo by Yu Nakamura)

BEIJING -- The Chinese automobile market shrank in July, the first drop in more than a year, as consumers shied away from American cars due to an escalating trade spat with Washington.

New-auto sales decreased 4% on the year to 1,889,100 vehicles last month, the China Association of Automobile Manufacturers said Friday. Uncertainty about the economic outlook dampened carbuying sentiment as well.

Volume declined on the year for the first time since May 2017 -- excluding data for January and February, a period in which sales fluctuate due to the shifting Lunar New Year holiday.

Passenger vehicle sales fell 5.3% to 1,589,500 units. General Motors joint venture SAIC General Motors dipped for a second straight month, sliding by 5%. The American automaker competes with Volkswagen for the top spot in China.

Another big Detroit automaker, Ford Motor, plunged 32%.

The slowdown in American brands was conspicuous, as German and Japanese rivals fared well.

Many Chinese consumers appear to be avoiding U.S. products as the tariff war between Beijing and Washington intensifies. A boycott of American products has been limited to cyberspace so far. But a salesperson at a GM dealership in Beijing feels the impact on consumer sentiment.

"When customers are undecided about what they want, we lose an opportunity to sell our offerings to those who compare us with Japanese and German brands," the staffer said.

Uncertainty over China's economy contributed to the downturn in auto sales. Some note that consumers are prioritizing condo purchases over cars in view of rising home prices, mainly in inland China.

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