China's economy has gravely affected many things, among them the once-robust car industry. By figures, the sales of cars, MPVs, and SUVs have dropped by 5.4 percent only last month.
Where analysts have thought that car sales would pick up, they actually worsened. China's woes could be blamed on the trade dispute they currently have with the United States, but it's more an accumulation of factors, according to Bloomberg. Among other things, China has to deal with an economy hobbled by factors such as seasonal problems-the weather and business spending, among other things.
The Chinese economy has suffered from these things and a weakened yuan didn't help, either. If not for the Japanese manufacturers Toyota Motor Corp. and Nissan Motor Co. boosting automobile sales, China's car industry would be considered dead in the water. They have to contend with US automakers like Ford trying to adjust to the trade friction by either moving their factories somewhere else or raising up prices to compensate for the additional tax.
This is what Ford is trying to adjust to. WSJ says that Ford, amidst the trade war, unveiled a new SUV designed to help their slumping sales. The new SUV, named the Territory, is a midsized SUV. It is being marketed to buyers outside China's business centers. These very centers are the very same business districts suffering from an accumulation of factors plaguing the Chinese economy.
The effect could be that buyers would instead look for cheaper, pre-owned models, or just choose other models that are cheaper. Buyers could also hold off on buying for the moment, potentially giving the market a chance to crash based on the lack of sales; they could hold off because the tariff dispute may just be a temporary thing.
Ford has been defiant of the US trade tariff fallout. It still plans to push 50 new vehicles into the Chinese market by 2025, but with the trade dispute being what it is now, the future is unfamiliar territory for the car manufacturer.
This and other tactics are what US automakers have been forced to do. With both the Chinese and the US lawmakers not backing down, the public, as well as the manufacturers, are the ones caught in the crossfire. It remains to be seen what further actions the US and China will do as they trade tariff bullets in the costly trade dispute.
