China auto sales fall 11.7% in Oc­to­ber

Gulf Times Business - - FRONT PAGE -

China’s au­to­mo­bile sales fell 11.7% in Oc­to­ber, bring­ing the world’s big­gest car mar­ket closer to an an­nual con­trac­tion not seen since at least 1990.

Data from the coun­try’s top auto in­dus­try as­so­ci­a­tion re­leased yes­ter­day showed 10-month cu­mu­la­tive sales fall­ing, amid broader slow­ing eco­nomic growth and a bit­ing trade war be­tween China and the United States.

The China As­so­ci­a­tion of Au­to­mo­bile Man­u­fac­tur­ers (CAAM) said over­all ve­hi­cle sales for Jan­uary-Oc­to­ber to­talled 22.87mn, down 0.1% from the same pe­riod a year ear­lier.

Sales in Oc­to­ber were 2.38mn, the fourth straight month of de­clines and the steep­est drop since early 2012.

“Main­tain­ing pos­i­tive growth to the end of the year won’t be easy.

There could be neg­a­tive growth,” Yao Jie, vice sec­re­tary gen­eral of CAAM, said at a brief­ing in Bei­jing.

Yale Zhang, head of Shang­hai-based con­sul­tancy Au­to­mo­tive Fore­sight, said the Oc­to­ber drop was in line with ex­pec­ta­tions, but there was lit­tle ahead to sug­gest things would pick up soon.

“Things don’t look good all the way to the end of the year, be­cause of weak­ness in the mar­ket and the high base for com­par­i­son from last year,” he said, adding he was watch­ing to see if car mak­ers made a push to spur sales.

“If the OEMs give up then sales vol­umes could be re­ally bad.”

The in­dus­try body said the drop was linked to slug­gish con­sumer de­mand and the im­pact of a slow­ing econ­omy.

In pre­vi­ous months CAAM also said that the trade war was im­pact­ing sales.

The down­trend in sales un­der­scores how in­ter­na­tional car mak­ers, from Gen­eral Mo­tors to Toy­ota Mo­tor, are in for a tough ride at a time when they are in­creas­ingly look­ing to­wards China as a driver of growth.

China’s car mar­ket is also a ma­jor em­ployer, eco­nomic growth driver and barometer of con­sumers’ will­ing­ness to open their purse strings for big ticket items.

China’s car deal­ers have been push­ing for Bei­jing to help prop up the sec­tor, in­clud­ing a pro­posal to au­thor­i­ties to cut the level of pur­chase tax on some smaller cars in half.

Reuters’ checks showed that some deal­ers are now of­fer­ing big dis­counts to cus­tomers to main­tain sales.

Shi Jian­hua, an­other se­nior CAAM official, added the body was not push­ing for short-term stim­u­lus mea­sures to sup­port the mar­ket and would pre­fer any in­cen­tives to be longer-term.

CAAM had orig­i­nally fore­cast a 3% rise for the year, in line with last year’s growth, though still sharply down from a 13.7% gain in 2016.

Sales of new-en­ergy ve­hi­cles – a cat­e­gory com­pris­ing elec­tric bat­tery cars and plug-in elec­tric hy­brid ve­hi­cles – re­mained strong, up 51% in Oc­to­ber, edg­ing down slightly from the pace of growth a month ear­lier.

That took new-en­ergy ve­hi­cle sales in the first 10 months of this year to 860,000 ve­hi­cles, up 75.6% from the same pe­riod a year ear­lier.

Peo­ple stand next to a Rolls-Royce Wraith car dis­played at an auto show in Kun­ming, Yun­nan province. China’s au­to­mo­bile sales fell 11.7% in Oc­to­ber, bring­ing the world’s big­gest car mar­ket closer to an an­nual con­trac­tion not seen since at least 1990.

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