Car mak­ers in China brace for an­other bumpy ride

The Star Malaysia - StarBiz - - Foreign News -

BEI­JING: Car mak­ers in China are brac­ing for zero to tepid growth in sales this year, af­ter a tough 2018 when the world’s top auto mar­ket prob­a­bly con­tracted for the first time in about two decades, as slow­ing eco­nomic growth drags on de­mand.

Com­pa­nies such as home­grown Geely and Bri­tain’s big­gest au­tomaker Jaguar Land Rover have in re­cent days flagged cau­tion about China sales in 2019, hit also by Bei­jing’s trade war with the United States.

“We should no­tice the big un­cer­tain­ties among macro econ­omy and trade ten­sions, which hit the auto mar­ket in China last year and may hap­pen again this year,” Yale Zhang, head of con­sul­tancy Au­toFore­sight, said.

China’s top auto in­dus­try as­so­ci­a­tion ex­pects the coun­try to sell 28 mil­lion ve­hi­cles in 2019, steady ver­sus 2018, while other gov­ern­ment and in­dus­try bod­ies see a 0%-2% growth.

China’s As­so­ci­a­tion of Au­to­mo­bile Man­u­fac­tur­ers (CAAM) is ex­pected to an­nounce later on Mon­day that the coun­try’s car mar­ket con­tracted in 2018, the first time since the 1990s. Shares in Chi­nese au­tomak­ers Geely and BYD fell more than 2% in morn­ing trade ahead of the data.

Au­to­mo­bile sales in China fell about 14% in Novem­ber from a year ago, steep­est in nearly seven years and the fifth straight de­cline in monthly num­bers.

Ford was the worst per­former among global car mak­ers in China last year, with its sales shrink­ing 37%.

Geely, China’s most suc­cess­ful car­maker, sold 20% more cars in 2018, but this was sharply lower than a 63% growth in 2017. It is fore­cast­ing flat sales this year.

Ja­pan’s Toyota Mo­tor, how­ever, bucked the trend, with a 14.3% rise in sales in China, ver­sus 6% growth in 2017, helped by bet­ter de­mand for its lux­ury brand im­proved mar­ket­ing ef­forts.

The bleak num­bers add to wor­ries for in­vestors, al­ready spooked by signs of a broader drop in de­mand from the world’s No. 2 econ­omy, es­pe­cially af­ter Ap­ple’s rare rev­enue warn­ing cit­ing weak iPhone sales in the coun­try. — Reuters

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