Sales of passenger cars in China fell 14 percent in the first half of the year compared with 2018, putting automakers in the world’s largest market on track for a historic second year of sales declines. China’s car market shrank for the first time in almost three decades in 2018 due to receding consumer confidence and cuts to government subsidies, adding to pressure on the world’s largest carmakers including GM and Volkswagen, for which China is their largest market. The gloom has persisted this year as Chinese economic growth has continued to slow and as the trade war with the US erodes business investment. But analysts said that recent retail sales suggested the decline in car sales may have bottomed out.
In the overall market, which includes commercial vehicles, sales fell 12-4 percent year on year in the first six months of 2019, the China Association of Automobile Manufacturers said on Wednesday. “Sales in the first half have missed our expectations and we estimate negative growth for the entire year,” it added. For June, vehicle sales fell 9.6 percent, according to CAAM. That followed a slide in May of 16-4 percent – the fastest year-on-year decline on record. The CAAM figures reflect sales by car companies to dealers, rather than retail sales to consumers.
Dealers slashed prices of cars last month ahead of stricter emissions regulations implemented in many cities from July. One Buick dealer in the eastern city of Changzhou said he had cut the price of vehicles by as much as 25 percent. Partly as a result, new car registrations rose 40 percent year on year in June, the first increase in 12 months.