The sales of passenger cars in China shrank by 5.8 percent to 22.35 million in 2018, the first-ever annual fall registered since 1990, yet there is still room for rebound and growth in the long run, according to China Passenger Car Association.
December registered a sales of 2.22 million, falling by 19.3 percent compared with December of 2017, marking a decline of seven months in the row in 2018.
Cui Dongshu, secretary-general of the association, said the situation turned out to be grimmer than expected.
He said there were various factors at play, for example, the grim overall economic development, spiking housing prices and slumping stock market, all of which weighing on consumers’ confidence.
In addition, the fourth quarter of 2017 presented a comparatively high base as consumers rushed to grip a purchase tax discount, making the falls in the same period of 2018 seem to be deeper.
The decline swept most of the auto brands. Delivery of General Motor in China fell to 3.64 million in 2018, a fall of 9.9 percent year-on-year.
SAIC Motor, China’s biggest carmaker by sales registered an annual growth of 6.8 percent in 2017, however, it just managed to secure a growth of 1.75 percent in 2018, bringing the annual sales to 7.05 million.
Geely shone as the best-selling local brand in 2018, registering a sales of 1.5 million, an increase of 20 percent from the previous year. The company did not expect too big a sales rise in 2019, setting the goal at 1.51 million, almost the same as that of 2018.
Cui said the main challenge automakers are facing is to give the products customers want.
In the words of Cui, “Declining car sales may speed up the process of squeezing out the incompetent players and we may see some of them exit the market next year.”
Giants are poised to face up to the situation.
GM decided to offer new or refreshed models, as many as over 20.
Volkswagen AG will also introduce new models, and plans to release a budget car brand in February to expand penetration deeper into smaller cities.
Cui hailed the moves of GM and Volkswagen as wise in such a context, pointing out that demand for passenger cars and commercial cars combined in China would still grow in the long run.
In his opinion, as tariffs on imported vehicles from the US are eased, and carmakers are cut excessive inventory, the auto market would see positive growth from the 2018 bottom.
He was bullish about the prospects of a growth rate of at least 1 percent for 2019.