China’s auto sales drop again on trade war, economic gloom
BEIJING: China’s automobile sales fell for the second straight month in August as a weak macro economy and trade frictions with the United States made consumers cautious about spending, an industry association said.
Chinese auto sales dropped 3.8 per cent in the month from a year earlier to 2.1 million vehicles, after a 4.0 per cent fall in sales in July and an increase of 4.8 per cent in June, the China Association of Automobile Manufacturers (CAAM) said.
China is the world’s largest auto market and a critical region for global carmakers, though regulators in the country have spooked some firms with a clamp-down on overcapacity in the sector and an aggressive push towards electric vehicles.
Worries about China’s overall economic situation led people to tighten their purse strings during July and August, CAAM assistant secretary general Xu Haidong said. The on-going trade spat with the United States was another factor.
“The trade frictions brought uncertainties, impacted sentiment and made Chinese customers more cautious,” Xu told reporters at a briefing in Beijing.
The recent sales dips have reversed a winning streak since February when sales volume fell 11.1 per cent. Overall sales for the first eight months of the year totalled 18.1 million vehicles, up 3.5 per cent from the same period a year earlier.
CAAM attributed weak sales of American brands to product and marketing issues, and Xu noted that there was no boycott of US auto brands.
Citing Ford Motor Co as an example, Xu said Ford is not rolling out new or redesigned products fast enough and has allowed Chinese consumers to turn to other brands. Ford’s China sales dropped by over a third in August.
CAAM has forecast overall market growth of 3 per cent this year, in line with the previous year but significantly below the 13.7 per cent gain in 2016.
Yale Zhang, head of Shanghaibased consultancy Automotive Foresight, said a weak stock market and higher gasoline prices had hit demand for popular sports utility vehicles (SUVS), which have been behind much of the market’s recent growth.
Sales of new-energy vehicles, a category comprising electric battery cars and plug-in electric hybrid vehicles, rose 49.5 per cent in August from a year earlier to 101,000 vehicles.
That took new-energy vehicle sales in the first eight months of this year to 601,000 vehicles, up 88 per cent from the same period a year earlier. China will ask the World Trade Organisation (WTO) next week for permission to impose sanctions on the United States, for Washington’s non-compliance with a ruling in a dispute over US dumping duties, a meeting agenda showed on Tuesday.
The request is likely to lead to years of legal wrangling over the case for sanctions and the amount.
China initiated the dispute in 2013, complaining about US dumping duties on several industries including machinery and electronics, light industry, metals and minerals, with an annual export value of up to $8.4 billion.
It won a WTO ruling in 2016, which was confirmed by an appeal last year. The case concerned the US Commerce Department’s way of calculating the amount of “dumping” — Chinese exports that are priced to undercut American-made goods on the US market.
The US calculation method, known as “zeroing”, tended to increase the level of US anti-dumping duties on foreign producers and was repeatedly ruled to be illegal in a series of trade disputes brought to the WTO.
The string of US defeats fuelled US President Donald Trump’s campaign to reform the WTO. Trump said last month the United States could withdraw from the WTO if “they don’t shape up”.