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Can Detroit automakers win in the cooling Chinese market?

Oct 14, 2014

Credit User: Robert Heese / Flickr

Global automakers look to China to rev up their global sales, but growth in China's car sales slowed again in September. 

According to The Detroit Free Press, sales in passenger vehicles in China rose 6.4% in September from a year earlier, slowing from 8% in August and 13.9% in May. 

John McElroy is an auto analyst and host of the Autoline Daily webcast. He says the numbers are direct indicators of the economic health of the Chinese economy, which seems to be cooling down.

In addition to that, McElroy says the Chinese government is starting to make plans in favor of the Chinese car companies, alarmed by the sales growth of the foreign brand vehicles.

"We've seen the government subsidies for buying cars with better fuel economy. The vast majority of those subsidies go to the Chinese brands only."

McElroy adds the Chinese government agencies were also banned from buying foreign cars. 

But McElroy explains American brands, including General Motors and Ford, have been doing fairly well in China, compared to Japanese brands, which suffered from the simmering political tension between China and Japan. 

"It's so easy for the shoes to be on the other foot. It could just as easily turn and hit the Americans, even the Europeans as well ... [American automakers should] just concentrate on the basics, come up with good cars that really meet the needs of customers," says McElroy.

* Listen to our interview with John McElroy above.