China faces an added threat down the road: Capacity glut

Detroit, Michigan – The news coming out of China right now is bad, and chances are, it’s going to get worse.

For weeks, we’ve been hearing about slowing sales, ever greater price discounts and increasing worries about their impact on profits. In July, vehicle sales fell 7.1 percent to a 17-month low, according to the Chinese Automobile Manufacturers Association. July sales of Volkswagen-branded cars declined 13 percent.

BMW’s Chinese partner, Brilliance China Automotive Holdings, reported a 45 percent drop in first-half profit, and fears are mounting that…

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