Car makers in China brace for another bumpy ride
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