China’s auto sales contraction worsened last month
The downturn in China’s auto market worsened in January and February as an economic slowdown and a tariff fight with Washington chilled demand in the industry’s biggest global market.
Sales of SUVs, minivans, and sedans plunged 17.5 per cent from a year earlier to 3.2 million SUVs, minivans, and sedans in the first two months of 2019, according to an industry group, the China Association of Auto Manufacturers (CAAM). Total vehicle sales, including trucks and buses, fell 15 per cent to 3.8 million units.
The drop in sales of passenger cars in January was 15 per cent.
Economists and industrial analysts often combine the first two months of the year when looking at consumer activity to screen out the effect of the Lunar New Year holiday, when factories close for up to two weeks and commercial activity falls.
Chinese consumers are putting off big purchases amid an economic downturn that saw growth last year fall to a three-decade low of 6.6 per cent. Trade tension with Washington is fuelling consumer jitters.
The auto slump is squeezing revenue for global and Chinese automakers that are spending heavily to meet government targets to develop electric vehicles.
Last year’s auto sales suffered their first decline in nearly three decades, falling 4.1 per cent from 2017 year to 23.7 million.
The downturn has prompted suggestions that Beijing will cut sales taxes or offer other incentives.
Sales by Chinese brands fell 23 per cent to 1.3 million units in January and February, according to CAAM. Market share for Chinese brands shrank by 3 per cent compared with the same time last year to 41.8 per cent.
Growth in sales of pure-electric and hybrid vehicles, which Beijing is promoting with subsidies, rose 98.9 per cent over a year ago to 148,000 units.
Sales of SUVs, usually a bright spot for the industry, contracted 18.6 per cent to 141,000.