China Cuts Down Payments to Spur Car Sales, But Broader Economic Fears Persist

• China is cutting minimum down payments on car loans to boost auto sales, but the move is unlikely to provide a major boost to the market

• A price war and consumer caution are limiting the impact, with benefits mainly accruing to brands favored by younger buyers like Tesla and Nio

• Car sales have been declining for years in China, slipping to single digit or even negative growth recently

• Some firms already offer 0% down payment leasing deals, so the new rules may have limited impact

• The policy changes could attract some new buyers, especially younger consumers, but broader economic worries continue to weigh on auto demand