Blame it on the Lunar New Year holiday. Vehicle sales in China dropped over 6% in August to 629,000 units.
Even with a day off, sales should be growing 15% to 20% just like they used to. According to The Wall Street Journal, "In 2007, China's vehicle sales rose 21.8% to 8.79 million units"
The Chinese vehicle market is supposed to be the salvation of General Motors (NYSE: GM), Ford (NYSE: F), VW and just about every other car company on Earth. If it does not deliver, where else can the car companies turn? Perhaps Luxembourg or Easter Island.
The news from China is a shocking bulletin to U.S. auto companies and their overseas peers. When the global economy slows, not even the world's fastest growing countries are immune. The North American market may be bad, but it is not alone in that.
The news will not do much for auto firm stocks. With trouble in the U.S. and EU and gas prices that are still too high, getting some traction in one or two big markets might have kept hope alive.
Ford and GM really do need those $50 billion in loan guarantees from the U.S. government. Now they have another reason to bring to Congress.
Douglas A. McIntyre is an editor at 247wallst.com.
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