China's carmakers are heading for a crash

https://www.reuters.com/commentary/breakingviews/chinas-carmakers-are-heading-crash-2025-09-04/

19•thelastgallon•5mo ago

Comments

SilverElfin•5mo ago

What does this mean for American car makers? It’s odd that cars are getting pricier and people keep buying them. A family SUV costs 50k now. At some point with unemployment growing, this will crater. And American car makers won’t be able to sustain their expenses, like paying workers at current rates.

jwilber•5mo ago

Right? Prices skyrocketed for all cars after COVID and never came down. At least some manufacturers have seen a pretty big increase in quality lately (Kia). Can’t say the same for our domestic manufacturers tbh.

I wonder how much of this language is just anti-Chinese. “Slumping” costs for price decreases. Whatever the outcome, it’s clear I’d much rather prefer to be purchasing a car in China than America at the moment. Probably nicer roads to drive on, too, if I’m being honest.

Fade_Dance•5mo ago

>Prices skyrocketed for all cars after COVID

Along with everything else, because of inflation.

Ex: New Chevy Trax is within $1k of a 2011 Ford Focus MSRP, and considerably lower than something like a 2011 Ford Fusion sedan MSRP inflation adjusted.

Americans do not buy econo-models. Chevy Spark, Nissan Versa, Mitsubishi Mirage, list goes on. Almost all of them had bad sales numbers, and most are now gone from the market because of that.

I am of the opposite opinion, and think that the latest wave of cheap compact crossovers is by far the best entry level offering from US companies in years. Heck, even Buick is doing well with the Envista. I'm definitely target market (drive a sub 100hp asian compact no longer offered in US markets), and honestly think the new 3cyl Trax is actually an appealing cheap little vehicle, which I never would have considered before from a US manufacturer.

SilverElfin•5mo ago

Are there any cars left under 20k?

linotype•5mo ago

At some point there will be no car for sale less than $50k. Without factoring in inflation, price is meaningless.

jwilber•5mo ago

In one year alone, used car prices rose over 40%. That market has not corrected itself since then.

That is not as simple to dismiss as, “prices rise everywhere: inflation.”

https://www.collegecounts529.com/wp-content/uploads/2023/08/...

https://www.consumeraffairs.com/news/used-car-prices-have-su...

linotype•5mo ago

It’s not “Anti-Chinese”. If Australia subsidized their car sector and exported a bunch of cars at a purchase price less than the cost to make a car in the US, the complaint would be the same.

simne•5mo ago

Looked carefully on graphs, and don't see reasons for worry.

All looks like recession, where measured changes within measurement error (~2..3 percents very usual for such things).

Even very much looks like typical market without much grow or shrink - sales of premium brands (Audi, Benz) suffered less than mass-market (Toyota), but again, all changes within measurement error.

Need more data to make serious conclusions about possible crash.

Only could say one conclusion - Chinese always made strange things, in this case constantly grow production capacity without demand. I don't understand where they planned to sell twice as now number of machines, except if planned to supply some big war.

general1465•5mo ago

To me the biggest concern with Chinese cars is the parts availability after manufacturing of the model has ended. It is not profitable to keep huge stocks of parts around, so it is unlikely that Chinese manufacturers are going to have them.

fspeech•5mo ago

When their EV transition is complete most of the old gas car lines will be obsoleted. As these are not the same owners and the EV factories are trying to accelerate the ICE carmakers' demise, it doesn't make sense to add the two capacities together. Interestingly the ICE makers are mostly JVs between foreign brands and Chinese SOEs, so the process of driving out the foreign brands also hurts the big SOEs.

rstuart4133•5mo ago

I found myself thinking the manufacturers going broke and market chaos is what I would expect to see during the changeover from ICE to EV's. From 2020 to 2025, production of EV's went from 6.3% to around 50%. Give the principle cost of an EV is the battery, and battery prices having dropped about 30% in the past year, of course the price curve is taking a downward dip. The price may be crashing, by the industry produced 2.3% more cars than the previous year. If the price keeps dropping, that will keep making more and more up. That ain't what I would call a crash.

But I guess if the USA's tariff wall does keep these Chinese EV's bay for a while, then when it collapses we will get to witness a real crash as the USA car industry implodes.

mensetmanusman•5mo ago

China is free to sell cars here tariff free after opening up factory production here. It’s the same that China requires.

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