China's auto sales face more bumps ahead, industry body warns

reuters.com Production & Sales 2019-09-11 18:43:38

China's auto sales could experience negative to low growth over the next three years, an official with the country's top industry association said, after sales fell for a 14th consecutive month in August.


The number of new energy vehicles (NEVs) sold contracted for the second month in a row, data from the China Association of Automobile Manufacturers (CAAM) showed.


Total auto sales fell 6.9% from the same month a year earlier to 1.96 million, CAAM said on September 11. This followed declines of 4.3% in July and 9.6% in June.


"The sales in the second half of the year should become better, but we are not sure to what extent the sales would be," Shi Jianhua, senior official at CAAM said.


"Perhaps the next three years will be at a low or small negative growth. We're all looking forward to sales picking up, but it's normal if we don't get that," he said, adding the key reason for the poor outlook was low consumer confidence amid an economic slowdown and trade tensions with the United States.


As recently as three years ago automakers had enjoyed double-digit annual growth in the world's largest auto market, before the brakes came on with the first annual contraction since the 1990s last year.


Sales of new energy vehicles fell 15.8% in August, CAAM said, following a 4.7% fall in July - their first decline since January 2017. NEV sales jumped almost 62% last year even as the broader auto market contracted.


NEVs include plug-in hybrids, battery-only electric vehicles and those powered by hydrogen fuel cells.


China has been a keen supporter of NEVs and has brought in sales quota requirements for automakers.


"Due to the impact of subsidies cut on new energy vehicles, sales for new energy vehicles continued to drop," Chen Shihua, assistant secretary general at CAAM, said.


CAAM said in July it expected auto sales to fall 5% year-on-year to 26.68 million vehicles in 2019.


It still expects sales of new energy vehicles to increase, but at a slower pace to 1.5 million, down from a previous forecast of 1.6 million.


China has been trying since January to boost consumption of a range of goods as the world's second-biggest economy slows further amid a trade spat with the United States characterized by tit-for-tat import tariffs.


"We expect these measures will promote the consumption of autos in China," Chen said.


The implementation of new vehicle emission standards earlier than the central government's 2020 deadline by 15 cities and provinces, which account for over 60% of car sales in China, spooked buyers too and hurt sales - particularly of traditional-fuel vehicles - according to CAAM, analysts, dealers and consumers.


The prolonged sales decline has made local carmakers such as Geely Automobile Holdings Ltd (0175.HK) and Great Wall Motor Co Ltd (601633.SS) cut expectations for sales and profit.


The decline has also prompted some global names including Peugeot SA (PEUP.PA) to close plants and adjust workforce.


China is also re-instituting an additional 25% tariff on U.S.-made vehicles and 5% tariffs on auto parts that had been suspended at the beginning of the year. Carmakers such as Daimler AG (DAIGn.DE) and Tesla Inc (TSLA.O) had adjusted their prices in China when the auto and auto parts tariffs were suspended.


(Writing by Emma Yang  Editing by Harry Huo)
For any questions, please contact us by inqury@fwenergy.com or +86-351-7219322.

Share this article
Connect with us

Editors Recommendations

1 China coal output slows down in Aug, but still at a high level 2019-09-16

China's raw coal production slowed down in August, with the year-on-year growth decelerating to 5% from 12.2% a month earlier, but remained at a relatively high level, statistical data showed.

2 China Coal Daily Track (Sep 16) 2019-09-16

Thermal coal Production area More small miners adjusted up coal prices in Yulin of Shaanxi after large mines' price rises, as sales went smooth alongside increased buying from utilities and min

3 China Aug power output boosted by hydropower, thermal power falls 2019-09-16

China registered a strong year-on-year pickup of 1.7% in power generation in August, which was mainly ascribed to increase of hydropower output amid abundant railfalls, official data showed.

4 Indonesian thermal coal prices keep firm in pre-holiday Chinese market 2019-09-16

Indonesian thermal coal prices maintained small rises in Chinese seaborne import market late last week ahead of the Mid-autumn holiday, bolstered by intensively-unleashed demand from Chinese utilities

5 Spot thermal coal trades remain in doldrums at China Bohai-rim ports 2019-09-16

Trading activity of spot thermal coal remained in the doldrums at Bohai-rim ports in northern China late last week, although coastal utilities' coal stocks dropped alongside strong consumption.

6 Shagang raises domestic rebar prices for mid-Sep shipments 2019-09-12

China's largest private steelmaker Jiangsu Shagang adjusted up rebar prices by 100 yuan/t for mid-September delivery in response to the rising trend in spot market. With the 100 yuan/t ri

7 China 15 provinces' coal mines under safety checks 2019-09-12

Coal mines in China's 15 provinces came under stringent one-month safety checks by seven inspection teams sent by the National Coal Mine Safety Administration from late August, in a bid to ensure safe

8 China's Rizhao Steel lowers HRC export price for Nov shipments 2019-09-12

China's Rizhao Iron and Steel gave a $5/t decrease in its second asking price of hot-rolled coil (HRC) for November shipments during export negotiations, sources said. One source

9 China Coal Daily Track (Sep 12) 2019-09-12

Thermal coal Production area Truck transport and production at some opencast mines were affected by rainy weather in Ordos, Inner Mongolia. Safety inspections strengthene

10 China's imported iron ore inventory rises further at major ports, CISA 2019-09-12

Stockpile of iron ore at the country's major ports stood at 121 million tonnes by end-August, up 4.9 million tonnes or 4.21% from a month earlier, data from China Iron and Steel Association (CISA) sho

Most Read Articles

1 Import coal curb concerns grow in Chinese market; Indonesian coal firm 2019-09-10

Concerns over possible tighter grips on coal imports were growing shortly after latest August import data presented a new seven-month high, which could trigger stricter moves in place to cap coal inta

2 China coal imports reach 7-mth high in Aug, GAC 2019-09-09

China's coal imports touched a seven-month high in August this year, representing a strong pickup compared with the year-ago level, showed official data on September 8. The country import

3 Survey report on coal import quota of major Chinese ports in Sep 2019 2019-09-11

China's coal imports have been steadily rising since January. According to data released by the General Administration of Customs on September 8, China imported 32.95 million tonnes of coal in August,

4 Indonesian thermal coal further gains steam in China; Australian coal listless 2019-09-09

Indonesian thermal coal prices further gained upward strength in Chinese import market late last week, backed by revived buying interest from traders after domestic power producers issued tenders of l

5 Poor demand weighing on Shanxi coking coal; Mongolian coal trades muted 2019-09-09

Coking coal market continued softening in northern China's Shanxi province late last week, primarily as coke market, which typically plays a significant role in steering coking coal market, remained s

6 Will China's spot thermal coal market firm up in late-Sep? 2019-09-11

After showing slight improvements for three sessions at the beginning of September, China's spot thermal coal market again returned to a lull period. Given currently tepid demand from downstream enter

7 Indonesia sets coal reference price at $65.79/t for Sep 2019-09-10

The Indonesian Energy and Mineral Resources Ministry has set the country's coal reference price known as coal benchmark price (HBA) at $65.79/t for September, which hit a three-year's low since Septem

8 China's Haoji railway sets freight rate higher than expected 2019-09-10

China's soon-to-be-commenced Haoji railway, the world's longest heavy-haulage rail line, has set freight rate higher than most expected for the fourth quarter this year, sources learned on September 1

9 Australian thermal coal prices backed by vessel rates fallback, yet outlook murky 2019-09-11

FOB prices of Australian thermal coal gained some support from recent fallback of vessel shipping rates, though outlook remains bearish for the short run. Freight rates for Capesize vesse

10 Australia's Gladstone port Aug coal exports to China slump 54.5% MoM 2019-09-09

Australia's Gladstone port posted a slump of 54.48% in coal exports to China compared with July's multi-year high, according to data from Gladstone Ports Corporation. In August, Gladstone

Scan to download sxcoal.com mobile APP

X