With China's car market up 24% so far this year, you'd think these would be fat times for auto manufacturers. But many of the mainland's carmakers are hurting. Sales are falling far short of lofty targets they had set for the year, driving prices down by as much as 15% and squeezing margins. The price wars "exert a lot of pressure on car companies," says Lawrence Ang, executive director of Geely Automotive, which has cut its production target for the year from 240,000 cars to 190,000. "Margins were not very high, and raw materials prices are up. So it's very difficult to make that all up by just cutting costs."rnIt's not only domestic brands that are feeling the pain. General Motors' Shanghai operation that turns out Buicks and Chevrolets is set to finish the year 5% below its production targets, while Guangzhou Honda (which makes Accord sedans and Fit compacts)rnis headed for an 18% shortfall, Citigroup analyst Charles Cheung estimates. A Peugeot joint venture is 21% below target; South Korea's Hyundai Motor is down 29%. "The 2007 car market has disappointed the majority of car assemblers in China," Cheung wrote in an Oct. 5 report.
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