China’s new-vehicle market contracted in 2019 for the second consecutive year; Sales declined 8.2%

China’s new-vehicle market contracted in 2019 for the second consecutive year as weak economy and prolonged trade war with the United States continued to supress demand. According to China Association of Automobile Manufacturers (CAAM), new-vehicle sales declined 8.2 per cent to just below 25.8 million units.

Sales of new car and light truck as well as of commercial vehicles, including buses and trucks, also fell by 9.6 per cent and 11 per cent respectively to below 21.5 million units and 4.3 million tonnes in the whole year of 2019, CAAM showed.

Shi Jianhua, a senior official at CAAM, commented, "We have moved away from the high-speed development stage. We have to accept the reality of low-speed development."

He added, "We had high-speed growth for a consecutive 28 years, which was really not bad, so I hope everyone can calmly look at the market."

Steep cut in subsidies in late June could be attributed to the muted demand for electric vehicles in the rest of the year. As a result, the electric-vehicle market in China contracted, with aggregate sales of battery-electric vehicles and plug-in hybrids dropping 4 per cent to roughly 1.2 million.

New EV deliveries slipped 1.2 per cent to around 972,000 units in 2019, while new plug-in hybrid sales plunged 15 per cent to some 232,000 units.

CAAM predicts the economic growth to remain subdued, resulting in new vehicles demand to dip another 2 per cent in 2020.

However, Volkswagen Group, whose crossovers and SUVs helped it report a smaller 1.1 percent sales decline in the first 11 months of 2019, has said that it expects China's market to grow at a relatively slow pace for the next five years.