NEW YORK (TheStreet) -- Those juicy profits that global automakers have been posting in China are growing less juicy and harder won, as recent slower sales and falling prices indicate.
General Motors' (GM) joint venture with SAIC Motor said last week it was cutting prices as much as 53,900 yuan ($8,700) on Buick, Chevrolet and Cadillac brands. In April, Chevrolet deliveries were down 5.6% and Buick sales fell 8.5%. The GM venture's reduction followed similar moves by Ford (F), BMW (BAMXY) and Volkswagen (VLKAY) last month.
"We're adapting to the situation to make sure dealers are not overstocked," said Karsten Engel, in a BMW blog. "It's a little bit of a trend downwards. This is the new normal and we have to accept this and we have to adapt to this."
It's not shocking to everyone. "We were really spoiled the last few years by the growth rates," said outgoing BMW CEO Norbert Reithofer. "But we saw in 2014 that they were increasingly on the decline, and above all, it was no longer possible to achieve the kind of contribution margins we had three or four years ago."
"The new normal" is the cliche of choice in discussions about China's red-hot automotive market, which is in the process of cooling off. "China and the new normal. China is slowing. The law of large numbers dictates it had to," wrote Joseph Spak, equity analyst for RBC Capital Markets in a note on Sunday.