Tough times ahead for auto sector
The automotive market is almost certain to see an annual decline this year, the first in 28 years, and the bleak prospects are unlikely to change in the next two or three years, officials from the country’s leading industry association said on Tuesday.
Vehicle sales in November fell 13.86 percent year-on-year to 2.55 million, the fifth consecutive month of decline, according to statistics released by the China Association of Automobile Manufacturers.
Total vehicle sales in the first 11 months stood at 25.42 million, a decline of 1.65 percent year-on-year.
Analysts said the decline could be even deeper in the whole year, considering a high comparative base last December due to the rush to take advantage of a purchase tax discount.
“Don’t forget, some 3 million vehicles were sold last December, but this year, sales rarely exceeded 2 million even in (what are traditionally) the best months of September and October,” said Lang Xuehong, deputy secretary-general of the China Automobile Dealers Association.
The CAAM said the fall was a combination of factors, including the current economic climate and declining consumer confidence.
Xu Haidong, an official at the organization, said China’s auto market has entered a period of adjustment, and is likely to see neither rebounds or further declines in two or three years.
Passenger cars, which account for the absolute majority of total vehicle sales, have seen deeper falls than total vehicle sales. In November, they slumped 16.06 percent year-on-year to 2.17 million. In the first 11 months, their sales reached 21.48 million, a decline of 2.77 percent year-on-year.
The lackluster performance has even affected the most popular brands in the country.
SAIC Motor Corp saw its November sales fall 10.4 percent year-onyear, following an 8.4 percent fall in October and an 8.2 percent decrease in September.
Geely, one of the country’s largest private carmakers, has also started to feel the chill. Its sales growth rate last month slipped to 0.3 percent, despite a 28.7 percent year-on-year rise in sales from January to November to 1.4 million.
New energy vehicles are the only comforting part amid the downturn in the broader automobile industry.
That sector, consisting of electric cars and plug-in hybrids, saw sales of 169,300 units last month, up 37.62 percent from the same month last year.
Their sales from January to November reached 1.03 million, exceeding the association’s whole year target of 1 million units. They may grow to 1.2 million and will see further growth in 2019, said the CAAM.
Carmakers are even more optimistic about the booming sector. Volkswagen expects sales of new energy vehicles to total 1.4 million in China in 2019, and 7 million in 2025.