Chinese car market shrinks for the first time in 20 years
In 2018, 22,4 million cars were sold in China, thus remaining the biggest market in the world but also regressing 5,8% compared to 2017. It’s the first time in 20 years that the Chinese car market isn’t growing anymore and the government is planning incentives to boost the market again.
Especially December 2018 was worrying with a 19,2% decline in sales, so that also the manufacturing side of the business in China was affected and several plants closed temporarily. Japanese car maker, Suzuki, even left the Chinese market completely.
The looming trade war between the US and China has, of course, affected these figures. Economy has slowed down in China and the customer is more careful before he does larger purchases.
The receding sales are also noted throughout Europe. Especially in December the decline was obvious and the slight increase in car sales in Europe during the first 11 months could totally be diluted by the overall disappointing sales in December.
Despite of the trade problems, the car market in the US is still going strong. 2018 is closing with a 0,6% growth over 2017 (which was already a very good year), largely due to the success of SUVs and pick-ups. “Despite the turbulence on the markets we have still great hopes for a strong 2019”, says chief economist, Emily Kolinski, from Ford.
After a very bad year 2018 share value of the car manufacturers is finally rising again and that is seen as a good omen in the sector. There is also hope for a final agreement between the US and China now that the latter has taken a much more lenient position and abandoned its intention to raise import taxes on all cars from 15 to 40%.
Beijing, on the other hand, wants to re-accelerate consumption again, especially in the sector of cars and household appliances. There will be some incentives to boost car sales, especially in rural areas where cars are still fairly seldom.
Some authorities, nevertheless, are warning for too much optimism. They fear that there is not enough margin to boost car sales significantly. “The phase of rapid growth in production and sales of cars is behind us, now a slower growth path will be the case for the near future”, has declared Xin Guobin, China’s Deputy Minister of Industry.