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China’s Cut of Yuan Hurts Global Automakers

Government devalues currency to jump start economy.

by on Aug.13, 2015

GM saw sales of its vehicles drop 6% in July. It's stock price has dropped more than 3% since China devalued the yuan earlier this week.

The abrupt devaluation of the Chinese yuan is likely to cost global automakers dearly in the months to come.

The value of the yuan dropped by 2% so far this week, reducing the revenue and profits earned by global automakers, such as General Motors Co., Ford Motor Co., BMW AG, Volkswagen AG and others. The government-ordered depreciation of the yuan follows a general slowdown in the Chinese economy during the last six months.

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Motorists in the world’s biggest market bought 1.3 million cars, minivans and other passenger vehicles last month, according to the China Association of Automobile Manufacturers. The slump in China’s auto market worsened in July as sales contracted by 6.6%, industry figures showed Wednesday. (more…)