Chinese car dealers are facing serious problems and analysts say they will suffer huge losses very soon. The reason is the low demand for cars, which is starting to be felt even now. Warehouses full of cars can also be a serious problem, reports Bloomberg .
Due to the low level of consumption and the fullness of warehouses, the price of cars in showrooms is decreasing. In this way, the dealers try to sell off the excess stock, but this does not help them either.
The China Automobile Dealers Association calls on the government to monitor the financial risks prevalent in the industry now. It is likely that the losses could exceed 20 billion dollars.
It is worth noting that dealers suffered significantly due to such price spikes. And government subsidies, which are supposed to encourage drivers to sell old cars, have a mostly positive effect on the sales of CNG cars, but not on electric cars, which are mass-produced by Chinese companies.