Even China Can’t Solve Carmakers’ Growth Problem

Persuading people to buy a new car in the world’s biggest auto market used to be easy for Mark Zhang, a salesman in the central Chinese city of Zhoukou. Flush with cash and eager for their first sedan or SUV, middle-class consumers who visited his showroom didn’t bother haggling over terms. “Back in 2016, a lot of buyers made quick decisions,” says Zhang, who has spent the past five years working at a dealership for a major Western brand that he can’t name because he isn’t authorized to speak with the media. “It was like taking home a new dress.”

That was before a slowing Chinese economy and a trade war with the U.S. sent a chill through dealerships across the Asian giant. For the first time in a generation, China’s auto market shrank last year. In Zhoukou, sales fell 4 percent; in December they plunged 33 percent, according to consultant WAYS Information Technology Co., leaving Zhang struggling to meet his monthly targets. “Now it takes days, back-and-forth visits, price comparing, and bargaining before people make up their minds,” he says. “Many people found it difficult to make money last year, so a lot of my clients hesitated big time to spend on expensive items like cars.”