Chinese car market worsens in July, Volkswagen scales back global goals

Whither China? Nissan's cool investor relations chief Joji Tagawa chats with China chief Jun Seki at the quarterly results conference

Whither China? Nissan’s cool investor relations chief Joji Tagawa chats with China chief Jun Seki at the quarterly results conference

The global auto industry has a drug problem. For years, the industry has been high on China. With sales suddenly in minus territory, the industry is going into withdrawal. China amounts to more than a quarter of worldwide auto sales. China is the largest market of global automakers Volkswagen and GM. For the past decade, China was a reliable supplier of insatiable customers. Suddenly, no more.

“In the month of July, total industry volume in China has worsened further,” said Jun Seki, Chief of Nissan’s joint venture with China’s Dongfeng. Speaking at Nissan’s quarterly results conference today in Yokohama, Seki stood by Nissan’s 1.3 million sales goal for Chin, never mind the skittish buyers.

Also today in Wolfsburg, Germany, Volkswagen was less gung-ho. The German automaker took down its sales forecast for 2015, says Reuters, “as demand weakens in China, where the group’s largest division delivers more than 40 percent of its vehicles, outweighing gains in Europe.” Volkswagen now predicts 2015 sales to be the same as in 2014, 10.1 million units. Yesterday, the Daily Kanban projected 10.08 million units for Volkswagen in 2015.

The revised plan could delay Volkswagen’s ascendancy to World’s Largest Automaker for yet another year. Toyota’s plan is to build slightly more than 10.1 million units in 2015. Toyota is much less dependent on China than Volkswagen. Toyota also profits from a strong U.S. car market, where Volkswagen is weak.