Price cuts as China sales keep falling
ECONOMIC COOLING, SMOG AND CONGESTION RULES TAKE TOLL
The slump in China’s car market worsened last month as sales fell 6.6 per cent, industry figures showed this week.
Drivers in the world’s biggest market bought 1.3 million cars, minivans and other passenger vehicles, says the China Association of Automobile Manufacturers.
Sales growth that peaked at 45 per cent in 2009 has declined steadily as China’s economy cooled and cities imposed ownership limits to curb smog and congestion.
The fall in recent months has been far sharper than expected, leading General Motors, Volkswagen and Chinese SUV brand Great Wall Motors to cut prices.
Global brands have invested heavily in trying to appeal to Chinese tastes. GM announced a US$5 billion ($7.56 billion) initiative on July 22 to develop models with its main Chinese partner, Shanghai Automotive Industries for sale in China, India, Brazil and other developing markets.
Last month’s slide in sales followed June’s 3.4 per cent fall, which was only the third such monthly drop since September 2012.
This year’s downturn has been so abrupt that industry analysts who expected sales growth of up to 8 per cent have cut their forecasts to as little as 1.7 per cent.
Total vehicle sales, including trucks and buses, dropped 7.1 per cent last month to 1.5 million vehicles, CAAM says.
Some vehicle types did better. SUV sales rose 34.2 per cent to 393,000 vehicles.
For the seven months to last month, passenger vehicle sales rose 3.9 per cent over a year earlier to 1.1 million units. Total vehicle sales came close to stalling, rising only 0.4 per cent over the same period of 2014 to 1.3 million.
Sales by Chinese brands rose 5.1 per cent to 494,000 and their total market share rose by 1.2 percentage points to 38.9 per cent.
General Motors, which competes with VW to be China’s biggest-selling auto brand, said sales by the company and its Chinese partners fell 4 per cent last month to 229,175 vehicles. Sales for the first seven months of the year rose 3.3 per cent to 1.9 million.
Ford said July sales of its vehicles were down 6 per cent from a year earlier to 77,100. Sales for the year were 620,588.
Nissan, the most popular Japanese brand in China, said last month’s sales were down 13.9 per cent at 84,200 vehicles. For the year to date, sales rose 2.8 per cent to 672,100.
BMW gave no July figures but said deliveries of BMW and Mini vehicles rose 1.3 per cent in the first seven months of the year to 265,215.