China, which is the world’s biggest automotive market, has witnessed consistent growth in car sales for the past two decades. However, recent reports citing China Passenger Car Association (CPCA) suggests that the sales fell six percent to 22.7 million units in 2018.
Reports suggest that the aforementioned slump is a result of China’s economic slowdown which has affected the performance of car manufacturers around the world as well. This news comes a few days after Apple had warned about a drop in its sales due to slowing iPhone demand in China.
China’s top car seller Geely is evidently forecasting flat sales this year.
China’s top car seller Geely is evidently forecasting flat sales this year. Foreign car makers such as Ford, Volkswagen, Jaguar Land Rover and General Motors have all reported a gradual dip in sales over the last few months in China. The China Association of Automobile Manufacturers (CAAM), a government-backed industry group, had cited the reason for such a slowdown on economic shift and “international reasons”, referring to China’s trade war with the US last month.
Last year, tariffs worth billions of dollars were imposed by each other on goods being imported at both destinations. CAAM had earlier stated that it was expecting the market to be unaffected in 2019, adding that the falling demand for diesel and petrol cars in the coming year can be effectively compensated with the rising sales of electric cars in the overall market to avoid another slump.
Foreign car makers such as Ford, Volkswagen, Jaguar Land Rover, and General Motors have all reported a gradual dip in sales over the last few months in China.
China’s government subsidies for car buying ended last year reducing consumer incentives to buy new cars. However, the China National Development and Reform Commission (NDRC) stated that plans to introduce policies to boost consumers spending on cars as well as home appliances were underway.
NDRC vice-chairman Ning Jizhe told China’s state broadcaster that there was still potential for more car sales. Adding to this, he said policies such as the introduction of a rural car purchase programme, or a cut in taxes on car sales were expected to help drive sales.