Lower profit margins set to foil Chinese carmakers’ price war plans despite falling sales

Narrowing profit margins due to higher raw material costs have dealt yet another major blow to China’s carmakers as they face shrinking market demand amid a rollback of purchase subsidies and tax incentives. The dire scenario could also dash Chinese consumers’ hopes for steep discounts, despite carmakers’ efforts to reduce their inventories, according to dealers and analysts. “The crux point is that most carmakers are facing squeezed margins and are unable to offer further price cuts to attract.