General Motors Co. (NYSE: GM) on Monday reported new car sales in China for the third quarter of 2018. Sales were down 14.9% year over year, which GM attributed to a “softening vehicle market.” For the first nine months of the year, sales are down 2.5% compared to 2017 sales.

Government incentives that drove consumer purchases ended in January and car sales have slowed ever since. The government also tightened lending rules, and that has hurt sales at the low end of the market. The tariff war with the United States also has driven up the price of cars, but the impact of that has yet to be felt fully.

GM reported deliveries of 835,934 vehicles in the third quarter and 2.68 million in the first three quarters of the year. In 2017, the company sold 982,311 vehicles in the quarter and 2.75 million in the first nine months.

Cadillac was the only bright spot for GM in the quarter, with sales up 4% year over year to 46,020 units. For the year to date, Cadillac sales are up 20.2% in China to nearly 150,000 units.

The company’s best-selling brand in China is Buick. Year over year, quarterly sales fell 19.1%, however, to 251,581 units from 311,124 a year ago. Buick sales are down 9.9% for the year to date and have fallen behind sales of the company’s Wuling brand of commercial vehicles. Wuling is one of two GM joint ventures with a Chinese automaker.

The other joint venture, with Baojun, saw a sales drop of 24.1% in the third quarter although sales are down just 1.3% year over year.

China’s government also has decreed that the country’s automakers will be subject to strictly enforced production and sales quotas of so-called new-energy vehicles (NEVs) beginning next year. The government already has supplied more than $15 billion in subsidies for NEV makers, and there is another $47 million waiting to be invested. The result: a total of 487 electric vehicle makers in China as of mid-July.

One of those manufacturers, Nio Inc. (NYSE: NIO), came public just last month in an initial public offering that raised $1 billion and put a market cap of $6.9 billion on one of China’s largest electric car makers. Nio’s shares have dipped since the IPO and the company’s market cap is down to around $6.2 billion currently.

For GM, China is a critical market. The company sold more cars in China last year (4.04 million) than it sold in the United States (3 million). 2017 marked China’s sixth consecutive year as GM’s top market. The run is likely to continue, given weaker U.S. sales, but that doesn’t mean it’s altogether good news for GM.

The company’s stock traded up about 1.2% in Tuesday’s premarket, at $34.65 in a 52-week range of $33.20 to $46.76. The stock’s 12-month price target is $45.47.

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