BEIJING, Sept 24 — Despite government subsidies as a push to replace older cars with electric vehicles (EVs), China’s car dealerships are struggling.
Bloomberg reported that the China Automobile Dealers Association said in a statement that car retailer losses reached 138 billion yuan (RM81.5 billion) in the first eight months of 2024 and that they were experiencing “extremely intense liquidity.”
The association has called on the government to offer more financial support as well as monitor dealerships’ financial risks.
At present time, China has introduced subsidies to encourage citizens to trade in their older cars for electric vehicles, but car dealerships are struggling amid a price war, as brands such as BYD continue slashing prices in an attempt to get Chinese customers to buy.
The desperation stems from high wholesale inventory, leading to dealers massively discounting excess stock just to clear showrooms.
The China Automobile Dealers Association also noted that sluggish consumption was also a big reason behind car dealerships’ woes.
