China is sending its world-beating auto industry into a tailspin

[Sherminator98]

https://www.reuters.com/investigations/china-is-sending-its-world-beating-auto-industry-into-tailspin-2025-09-17/

[mackinaw]

Autoline Daily mentioned this too.  From earlier today:

 

Could China’s auto industry be headed for a collapse? That’s one of the possibilities raised by an in-depth report from Reuters. Overcapacity triggered a price war that is turning into a financial disaster. The vast majority of Chinese automakers lose money because they’re building to government-issued production targets, not customer demand. On top of that, 70% of car dealers lose money because they’re selling cars for 20% below their own cost. And there’s no relief in sight. Municipal, provincial and even the central government continue to subsidize these companies. They do not want to see factories closing, which would trigger massive layoffs and drag consumer confidence even lower. Even foreign automakers are caught up in it. Reuters reports one independent retailer is selling Chevrolet Malibus for $10,000 under their sticker price, and Audis are going for 50% off.

[Texasota]

Centrally directed economy vs market based economy, no surprise here. Same thing happened with their housing market crash, with one key difference. China can’t dump their excess housing inventory on other countries like they do for their excess auto inventory.

[akirby]

And some of you scoffed when I said there were government subsidies and shenanigans going on in China with automobile manufacturing and we shouldn’t allow unrestricted imports.  

[Texasota]

1 hour ago, akirby said:

And some of you scoffed when I said there were government subsidies and shenanigans going on in China with automobile manufacturing and we shouldn’t allow unrestricted imports.  

Yes, you were correct. These predatory trade practices have been in play for decades. Rare-earth minerals are another huge example. Government subsidies to put competitors around the globe out of business.