Dealers upset over foreign carmakers' stock push in China

Foreign carmakers on the mainland may struggle to dictate sales goals in the future after dealers complained to the government that inflexible targets set during a market boom obliged them to buy too much stock and bear the brunt of a drop in demand.

Carmakers largely stuck to targets in the past year, selling cars to dealers on schedule. But dealers reduced retail prices and booked losses as sales growth in the world's biggest car market halved from 2013's 14 per cent.

"Carmakers have high market expectations. But the reality is: supply exceeds demand," said Luo Lei, a deputy secretary general of the China Automobile Dealers Association. "In the past, dealers were angry, but dared not speak out. But now, they have to shout because the situation is getting so unbearable."

The association last month filed a report with the authorities on the practice of transferring stock to dealers.

The report from the nation's biggest dealer body could help change the balance of power at a time when carmakers are starting to alter expectations in an economy expanding near its slowest rate in 24 years.

Japan's Honda Motor and Nissan Motor lowered their mainland sales forecasts while executives say Toyota Motor Corp is likely to miss its goal for last year.

Germany's BMW said it expected profit margins to narrow as the market "normalises" from the growth spurt of the past few years.