With July approaching, however little automakers in China have reached their sales target of the first six months. In order to handle the new normal in Chinese auto market of marginal growth, auto enterprises have begun to reduce their production capacity and lowered their annual sales target.
Previously these automakers have lowered the official sales price, but failing to promote the sales. In April, followed Changan Ford, Beijing Hyundai, FAW-VW and Shanghai GM, Shanghai VW launched the movement of lowering the official sales price of several models of cars. The reason why the official sales price reduction didn’t encourage sales is that customers can enjoy the discount only if they give up the previous discount provided by the local 4S shops.
John Lawler, Chairman and CEO of Ford Motor (China) confirmed in the CES (consumer electronics show), which held in Shanghai in May 25, 2015, that Ford had reduced its capacity to decrease the pressure of inventory for dealers. Besides, in the mid of April, BMW China and Brilliance BMW jointly announced that they would lower their sales target for the second quarter. JRL, who had just realized production localization in China, started to change the sales target for the second quarter and for the whole year. In order to improve the cash flow of its second quarter dealers, it changed some business policies.
According to statistics in output, many automakers reduced their output units, including FAW-Volkswagen, Shanghai GM, Dongfeng Nissan, Dongfeng Honda and Beijing Hyundai. And FAW-Volkswagen’s production dropped 25% in April year-on-year.
