China’s vehicle market heading for another decline in 2019, says GlobalData

September’s China vehicle market was the 15th consecutive monthly decline in China, the world’s largest and it’s a growing concern for the global automotive sector,

David Leggett, Automotive Editor at GlobalData, a leading data and analytics company, offers his view:

“China’s vehicle market in September fell 5.2% from the same month a year earlier to 2.27 million vehicles, according to the China Association of Automobile Manufacturers (CAAM). There is little respite in prospect. GlobalData forecasts that the Chinese light vehicle market in 2019 will dip again, after 2018’s slip, to around 25 million units (28 million in 2018), which will be only the second year of annual decline since 1990.

“The decline this year mainly reflects slowing economic growth in China and deteriorating domestic sentiment as trade relations with the US continue a volatile and uncertain path.

“In addition, China’s vehicle market this year has also been disrupted by new emissions regulations and by the long-term switch to new energy vehicles through sales quotas. Subsidies for electrified vehicles have also been cut, slashing growth in what has been a buoyant part of the car market.

“Total vehicle sales in the first nine months of the year declined 10.4% from 20.49 million in 2018 to 18.36 million units in 2019.

“Many vehicle manufacturers are experiencing tough competitive conditions and sharply lower volumes in China this year – with margins on sales in China also dented.

“General Motors and its local joint ventures reported a 17.5% sales decline to 689,531 units in the third quarter, resulting in a 15.6% drop to 2.26 million units in the first nine months of the year.

“Ford sales dropped by over 30% to 131,060 units in the third quarter and by over 28% to 421,000 units year to date.

“Stock movements this year have played a part, but the underlying picture is one of sluggish demand in China persisting as the economy slows and trade tensions with the US continue.”

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