Car buying in China is slowing, impacting Tesla and legacy carmakers. The Chinese companies are now looking to dominate elsewhere.
But some of that car-buying demand in China starting to wane, according to an August 17 note from"Various EV makers have launched limited-time campaigns amid subpar demand visibility and macro uncertainty," the bank's analysts said, adding that price competition is expected to intensify this quarter.Slowing auto demand in China is actually bad news for the legacy car companies
First, the automakers like Ford and GM that have tried to strategize salvaging their losses in China could be too late, Morgan Stanley analysts said. "Not only do legacy [automakers] have to face tough EV competition in China from the likes of the vertically integrated and increasingly affordable EVs," the note said,"they also have to reverse the trend of decreasing sales volume, profit, and share in a decelerating domestic market."
It's a multi-pronged storm for traditional firms, and they know they're up against Chinese affordability, variety, and quality, according to Morgan Stanley. Ford CEO Jim Farley"has been pretty consistent about the strength we see in the BEV capability of the Chinese OEMs," the automaker's CFO John Lawler said at a Deutsche Bank conference in June, per a Sentieo transcript."I think we're past the point there that you can say, are they going to, are they not?"Second, weakening demand means many automakers, both Chinese and otherwise, are dropping their prices.
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