As for stimulus measures and online showrooms buoying sales, hopes are thinning. Even the likes of Alibaba Group Holdings Ltd. have tried their luck at online car sales, and it hasn’t resulted in much. "Dealership earnings are primarily driven by new car sales. All else being equal, an increase of 50 basis points in new car sales margins boosts net profit by more than 10%, according to an analysis by HSBC Holdings Plc. China’s auto dealers are trading at an average 8.5 times their one-year forward earnings.

Source: Mint February 19, 2020 23:26 UTC