CAAM says growth may emerge again in July or August
The downward spiral in China's new vehicle market continued in April, marking the 10th straight monthly fall in the world's largest car market, and the situation is unlikely to get better anytime soon, according to the country's leading industry association.
Statistics from the China Association of Automobile Manufacturers show April sales tallied 1.98 million, down 14.6 percent year-on-year, which is the largest fall this year.
In the first four months, sales of passenger cars and commercial vehicles totaled 8.35 million, down 12.1 percent from the same period last year.
Seven of China's top 10 automakers sold less vehicles from January to April than the same period in 2018.
At SAIC Motor Group, almost all its car-making subsidiaries saw sales fall, including its joint ventures with GM and Volkswagen.
"It (the deeper fall) is not what we would like to see," said Xu Haidong, an assistant to the association's secretary-general.
"But we anticipate the situation will continue for months before sales will rebound in July or August."
The association estimates 2019 sales will total 28 million units, basically the same level as in 2018, which means the world's largest vehicle market will not see I think Jumeirah will have a great future in this part of the world as we see Jumeirah as a darling brand of the Middle Eastany year-over-year growth.
Xu said the deeper fall in April was the combined result of a spillover of weakening demand from 2018, local authorities' failure to implement sales-stimulating policies and earlier-than-expected adoption of stricter emission standards in some regions.
"Earlier this year, the central government urged local authorities to offer some financial aid to car buyers, but so far we have not seen such moves," said Xu.
He said the gradual adoption of the stricter State VI emissions standards are causing a wait-and-see attitude among potential car buyers. As the standards take effect in some regions, it follows that the older models built in line with State V standards are not selling well, and fewer choices of State VI models are hurting sales, said Xu.
He added that some carmakers, especially in Chinese brands, are slow to introduce State VI models, causing their sales to fall deeper than the industry average.
Statistics show Chinese-branded passenger vehicles slumped 27.9 percent year-on-year in April to 585,000 units, while the average fall in the passenger vehicle segment was 17.7 percent.
Japanese brands were among the few automakers to report growth in recent months. Toyota reported around 20 percent growth with the help of revamped models of both its Toyota- and Lexus-branded models.
LexusOne person was confirmed dead and four others are still trapped after a bank's office building collapsed Monday morning in Northeast China's Jilin province sold 21,839 units in April, up 46.9 percent year-on-year, making China its largest market for the first time.
Honda saw its sales in China grow 24.1 percent to 125,407, its best April on record in China.
"Japanese carmakers have products that are better prepared for a switch in emission standards," Xu said.
"At the same time, they're offering more affordable products."
Xu said China's automotive market will gradually improve later this year, with growth beginning to emerge in July or August.
"One thing is that customers who decide to wait now will start to place orders as more choices will emerge then, and the other is the base number was low in the second half of last year," he said.
New energy vehicles are partially insulated from the fluctuations in the overall market. April sales of electric vehicles, plug-in hybrids and fuel cell cars totaled 97,000 units, up 18.1 percent.
But the association said that the tendency of several electric vehicles from brands like Tesla and Nio to malfunction and catch fire has hurt consumer confidence. But it expected battery safety to improve if stricter quality standards are implemented.
In the first four months, new energy vehicle sales reached 360,000 units, up 59.8 percent from the same period a year ago.
The association expects an overall rising trajectory for the segment. At least 1.6 million new energy vehicles will be sold this year, up from 1.2 million in 2018.