China auto sales go downhill for fifth month running
But yearly electric-vehicle sales passed the 1 million mark for the first time in November
Chinese auto sales declined for the fifth month in a row in November, piling pressure on auto makers to plot a return to growth in 2019.
But yearly electric-vehicle sales in China passed the 1 million mark for the first time last month, as a government-led shift away from gasoline gathers pace.
Chinese vehicle sales fell 14% last month compared with November 2017 to 2.55 million, the government-backed China Association of Automobile Manufacturers said Tuesday. Sales in the first 11 months of 2018 were down 1.7% year-over-year.
Passenger-car sales fell 16% year-over-year in November, and declined 2.8% in the January-November period. Sales of commercial vehicles were relatively strong by comparison, rising 2% last month and 5% in the first 11 months of the year.
A late-year sales decline is especially troubling for the industry in China, with December historically the month in which auto sales peak.
Even so, the government has shown no interest in helping the sector by cutting its autosales tax, a measure it has previously employed to help auto makers through lean spells.
It is unhealthy for the Chinese auto market to depend on official assistance every time sales dip, said Shi Jianhua, the association’s deputy secretary-general. In a truly competitive market, good companies will prosper and bad companies “will be forced to adjust and upgrade,” Mr. Shi said.
The government’s tax on lightvehicle sales only returned to its usual level of 10% at the start of 2018, after earlier being cut as a stimulus measure, likely making officials reluctant to intervene again so soon, said Ernan Cui, China consumer analyst at Gavekal Dragonomics.
But more important, government policy has shifted decisively toward promoting EV sales and away from gasoline cars, Ms. Cui said, making any official moves to stimulate the market as a whole increasingly unlikely.
Helped by government subsidies and other pro-EV policies, electric-car sales reached 1.03 million in the January-November period, up 68% yearover-year. That compares with roughly 313,000 sold in the U.S., according to website Inside EVs, which tracks electric-car sales. China’s EV market is on course to achieve a government target of 2 million sales in 2020.
But despite rapid growth, EVs still only accounted for 4% of the 25.42 million vehicles sold in China in the first11months of the year, making them a fringe concern for all but a few specialist EV makers, at least for now. A handful of local manufacturers, chiefly BYD Co. and Beijing Auto, dominate the Chi- nese EV segment.
Foreign auto makers must start building EVs in 2019 in line with government regulations, but a more immediate concern for most foreign players is finding a way to juice sluggish gasoline-car sales in a market that had, until now, always delivered growth and reliable profits.
For Ford Motor Co. that task was complicated Monday by the announcement that Henry Li, the company’s vice president for sales and marketing in China, had resigned “for health and family reasons.”
Mr. Li only assumed the role in May. Ford’s China sales fell 31% in the first 10 months of 2018 year-over-year. A new country head, former Chery Auto chief executive Chen Anning, took the reins recently, tasked with producing a turnaround.
Ford isn’t the only auto maker suffering from the slowdown. Volkswagen AG reported sales of its VW brand fell for the sixth straight month in November, although VW remains the bestselling auto brand in China by a significant margin. General Motors Co.’s Chinese joint ventures—which build a mix of Buick, Cadillac, Chevrolet and locally branded vehicles—both reported falling sales for the fourth month in a row.