China’s economic downturn is hitting the luxury car sector, dealing a blow to European brands.
Chinese consumers are leaning toward more affordable homegrown models, in part because of a government trade-in subsidy meant to stimulate domestic consumption, The Associated Press wrote.
Many wealthy drivers are also increasingly shy about public displays of wealth amid the slowdown.
The trend is bad news for European giants like Porsche, Mercedes-Benz, and BMW, which are already struggling in China.
Other corners of the luxury market, though, are growing more optimistic: Executives at Prada, Coach, and EssilorLuxottica said they’re seeing demand stabilize, CNBC wrote, while Dior just opened a new flagship building in Beijing.