Infrastructure investment and the property sector have led China’s economic slowdown in 2018, but autos are starting to drag on both industrial output and consumer spending. A naturally maturing market, consumers’ concerns about lower incomes and rising fuel costs, and weak property sales are all producing softer demand for cars. Policy measures to stimulate demand are probable in the next six months, either via tax breaks or consumer subsidies, which should coincide with a modest upturn in consumption as monetary easing stabilizes economic conditions.
