US Automakers Struggle In China, But Not Because Of Trade Wars

Industry News

Chinese buyers may just not want American cars.

US trade with China has been big news in recent months, with President Donald Trump announcing a 25% tariff on Chinese goods. As trade tensions with China grow, industry experts have been worried about the negative impacts on US automakers. According to Automotive News, American automakers are in fact losing ground in the Chinese market, although the cause may not have anything to do with the recent trade war.

In reality, the drop in demand for American cars in China may be due to a lack of competitiveness. The China Association of Automobile Manufacturers says the market share of US brands in China fell from 12.2 to 10.7 percent in the first eight months of 2018. Xu Haidong, the association's assistant secretary general, says the drop can mainly be attributed to companies like Ford not updating their model lineups. Ford recently introduced the "new" Territory SUV in China, which is actually a rebadged version of the Chinese-built JMC Yusheng S330.

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Surprisingly, there's no anti-American car sentiment in China despite the recent tariffs. China has seen three straight months of declining car sales due to economic woes, so American cars may just be a casualty of the economic downturn. Ford recently canceled plans to sell the Chinese-built Focus Active in the US because it would be subject to tariffs. It seems like the struggles in China have little to do with the trade wars and more to do with a lack of compelling products. Perhaps with the Chinese market slowing down, automakers like Buick can finally focus on building sports cars and coupes that don't sell well in China.

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