New Delhi, May 19 -- China is the world's largest market for new cars and new electric vehicles. It's fast to adopt the latest technology and produces some of the world's finest cars.

It's also a terrible, deteriorating market for auto makers, and the country isn't only exporting its vehicles, it's exporting its disastrous market dynamics.

"China is a situation, right now, of hyper competition," Mercedes-Benz CEO Ola Kallenius tells Barron's. "There are 100 players in the game. What will the market ultimately support? We shall see. But that is a very tough game at the moment."

It's probably closer to three dozen meaningful auto makers. Kallenius isn't wrong though. There are more than 100 nameplate brands vying for market share.

The d...