
Slowing economic growth and strict vehicle emission rules may bring down China’s new vehicle sales to 26 million in 2019 registering a drop of about 8 per cent YoY. This will be second consecutive yearly drop for the world’s biggest auto market.
The sales drop forecast by Fu Bingfeng, executive vice chairman of the China Association of Automobile Manufacturers (CAAM) is more than his previous forecast of 5% drop in July. China, which has seen the biggest growth in the global auto industry in last 20 years, is going through downturn leading many leading automakers to cut down production. Automakers such as General Motors, Ford and Peugeot have all reported double-digit percentage sales declines. Smaller automakers have started cutting or closing down capacity and merging with other companies.
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"For this year, we now expect to see if we can hold on to (sales of) 26 million vehicles," Fu said Wednesday, speaking on the sidelines of a Singapore forum led by the China Center for International Economic Exchange.
Fu however added that the decline in sales should be considered as a part of industry's transformation toward higher production standards, lower-emissions vehicles and new energy vehicles. He said the association is bullish about the future growth of the auto sector and auto sales are expected to hit 30 million by 2023 with further headroom.
Light vehicle sales dropped 3% YoY to 28 million in 2018, the first drop since 1990s. Monthly sales dropped in September for the 15th consecutive month. A spokesman for CAAM in Beijing projected an 8 per cent decline in sales in 2019, without disclosing further details.
Japan's Suzuki Motor Corp. became the first big foreign car manufacturer to exit the country after facing the downturn.
The NEV sector has also experienced a sales drop, due to subsidy cuts. NEV sales plunged 34 per cent in September following a 16 per cent decline in August. However, Fu is of the view that NEVs are still at its early stage and its numbers are not very significant for the auto sector.
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