Overseas car brands have seen a drop in sales in China after the government increased the purchase tax rate for smaller vehicles from 5% to 7.5%. China-produced Ford sales were down at almost 20% year-on-year in the first quarter and sales of locally-produced Hyundai cars were down 15% in the same period. 

The phasing out of preferential tax policies for smaller vehicles is one reason behind slow sales, but there are also signs that foreign car brands have problems with their strategies for the Chinese market.

Meanwhile, sales of Chinese brands are on the up. Automaker Geely almost doubled its sales in the first quarter of 2017. While other domestic brands such as Changan and Haval saw 10% growth year-on-year in Q1 sales.