Ford Motor Co. announced that its China sales dipped 7% YoY in July as demand for small sedans plummeted. The drop in demand may be due to a recent change in China’s vehicle-tax laws that make it pricier for consumers to purchase vehicles with smaller engines. The government’s tax on vehicles with engine displacements of 1.6 liters or less increased from in January 5% to 7.5%. Ford’s year in China has not been all bad, though. Its JV with Chinese automaker Jiangling Motors saw sales increased 11% YoY in July and year-to-date sales are up 17% YoY.