China’s automotive market slowing down
August 14, 2018 Category China News Round-up, Weekly
China’s automotive market is showing signs of a slowdown, with a sales drop in July, the second monthly dip within six months, but the China Association of Automobile Manufacturers (CAAM) is maintaining its estimate of slight growth for the year. A total of 1.89 million vehicles were sold in July, a 4% fall from the same month last year. That brought total sales from January to July to 15.96 million, up 4.3% year-on-year. Despite growth in the seven-month period, there are signs that the market will enter a period of volatility in the second half of the year.
July sales of the once-popular SUVs surprisingly slumped 8.2% from the same month a year earlier. Sedan sales, which registered 9.1% growth in June, seemed to have suddenly lost steam, registering a 1.3% fall from July 2017. MPVs continued the more than 20% fall seen in previous months. But Xu Haidong, Assistant to the CAAM Secretary General, said there is no need to panic, as July is usually a month with lackluster sales, adding that sales would usually start to go up starting from August . He added that Sino-U.S. trade tensions over the past months have also played a part in the extraordinarily poor performance this year by damping customer confidence, although China’s retaliatory tariff imposed on cars made in the United States should not have noticeable influences on the car market, considering the small volume of imported vehicles.
Dealers’ inventories are now 2.6 times their monthly sales, a dangerously high level. The CAAM does not expect the market to match the 5.6% growth rate achieved in the first half of the year, but has no plans to change the estimate of 3% growth for 2018, made at the beginning of the year. Sales of commercial vehicles in the January to July period soared nearly 10% year-on-year to 2.59 million units. New energy vehicle (NEVs) sales hit 84,000 units in July, up 47.7% from the same month last year. The growth rate from January to July stood at 97.1%, bringing sales in the seven-month period to 496,000 units. The CAAM expected sales of NEVs to exceed 1 million this year, up from 777,000 units sold in 2017, the China Daily reports.
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