Automotive industry shifting from fast expansion to slow growth
October 30, 2018 Category China News Round-up, Weekly
China’s automotive industry is shifting from super-fast expansion to slow growth, after the country’s car market already reached an immense scale in production and sales volume, Xin Guobin, Vice Minister of Industry and Information Technology, said. “The recent slow expansion in car sales was chiefly because more than 29.4 million automobiles were sold in China in 2017. It would be very difficult to continue robust momentum on the basis of such a big number,” Xin said at a news conference in Beijing.
He made the comments after the growth rate of China’s auto sales stood at 1.5% year-on-year in the first three quarters of 2018. The weak rate triggers questions about whether China’s automotive industry is entering a cold winter, despite the fact that more than 20 million cars were sold in the nation over that period. “Though the growth rate, as a whole, will slow down, many bright spots are promising positive development,” Xin added. The revenue growth of the auto sector outpaces that of its sales and production volumes, highlighting that the industry is in good health. From January to August, automobile companies in China have seen their revenue grow by 8.8% year-on-year. The industry is also increasingly concentrated in the hands of top players, which will give full play to the scale effect. Currently, the 10 largest automakers in China account for about 90% of the whole market.
John Zeng, Managing Director of LMC Automotive Shanghai, said the country’s new energy vehicles sector will also maintain strong momentum thanks to both favorable government policies and consumers’ growing desire to embrace eco-friendly cars. In the first three quarters of this year, the production and sales volume of new energy vehicles reached 735,000 and 721,000 in China, marking year-on-year increases of 73% and 81%, respectively, the China Daily reports.
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