Slowing growth in China hits sales as report by the EU Chamber of Commerce shows that many firms plan to cut costs

Nokia Corp, which is owned by Microsoft Corp, closed its factory in Dongguan, Guangdong province, in April. Liu Yalai / China Daily

Jack Luo, a salesman at a German auto dealership in Beijing, plans to start looking for another job after four of his friends left to join other companies.

Before car sales started to stall this year, he could make at least 15,000 yuan ($2,346; 2,106 euros) a month. But now he has to rely on his basic salary of about 3,000 yuan.

Last month, new car sales dipped 2.5 percent to 1.3 million vehicles, according to the China Passenger Car Association. That was the lowest monthly level since February 2014.

Data published by another industry organization, the China Association of Automobile Manufacturers, shows car sales by its members fell 6.6 percent in July, also marking a 17-month low. The decline comes despite deep price cuts by manufacturers to woo customers back into showrooms in the world's largest car market.

"It is a tough business now," says Luo, 30, and married. "We have to work harder to make a sale because customers are very demanding and budget-savvy."

But then, Luo is not the only one who has tightened his belt because of the economic slowdown. As international companies here report slowing demand, many employees face pay cuts at the very least.

A survey by the European Union Chamber of Commerce in China shows that 39 percent of EU-based companies planned to trim costs this year through layoffs. In 2014, that number was only 24 percent.

At the same time, one-third of those companies polled revealed that they are putting investment and expansion plans on ice.

"China's economic slowdown is here, and it is already significantly impacting the performance of European business in China, which is increasingly concerned about the heightened threats that a deepening downturn will pose," the survey, based on more than 500 EU companies in China, says.

Firms in the machinery industry have been badly affected as have those in the legal sector. The automotive and auto components industry, along with the chemicals and petroleum sectors and financial services, have also suffered, according to EU Chamber of Commerce report.

In the car industry, Volkswagen Group and General Motors Co have cut their sales forecasts this year. VW announced in its first half financial report that growth in China, its single largest market, has been shrinking since the beginning of this year.

Other major EU companies, such as Philips NV, the multinational group based in The Netherlands that focuses on the electronics, healthcare and lighting sectors, are also feeling the pinch.