Gloom in China's Car Market to Persist
(Bloomberg) -- The historic slump in China’s car demand is set to persist, with dealers showing no signs of boosting orders from manufacturers as economic woes and stricter emissions rules keep consumers away.
Wholesale deliveries of passenger vehicles fell 7.8% to 1.73 million units in June and have now slid for 12 consecutive months, the China Association of Automobile Manufacturers said Wednesday.
While retail sales of cars rose in June -- the first increase in a year -- the gains were helped by heavy discounting by dealers clearing inventory that had built up during the year, another industry group said earlier in the week.
The biggest car slump in a generation is hitting both manufacturers and dealers, and risks affecting the investment plans of auto companies that have for decades relied on the world’s largest market for growth. CAAM is forecasting “negative growth” in China’s passenger-car sales for the full year, and researcher LMC Automotive last month predicted a 5% decline.
Sales are set to recover somewhat in the second half, but not enough to avoid a full-year decline, said Shi Jianhua, a deputy secretary general at CAAM. The extent of any rebound will depend on consumers’ confidence and companies’ efforts, he said.
India, the No. 4 car market globally, is also suffering from a prolonged decline. Sales of passenger vehicles in the country fell 17.5% in June from a year ago, the eighth straight monthly drop, the Society of Indian Automobile Manufacturers said Wednesday.
©2019 Bloomberg L.P.