Alibaba may have smashed its 11.11 Singles Day sales record yesterday ($30.8 billion sales in 24 hours, including your Lazada haul), which points to robust consumer spending, but China auto sales is heading towards its first annual decline, the first seen since at least 1990, Reuters reports.
There are plenty of worries about the state of the world’s second largest economy, not least the trade war with the US and slowing growth, and car sales have mirrored that. Auto sales fell 11.7% in October, pushing Jan-Oct year-to-date sales down 0.1% (22.87 million) from the same period last year.
October’s 2.38 million was also the fourth straight month of declines and the steepest drop since early 2012, according to data from the China Association of Automobile Manufacturers (CAAM). “Maintaining positive growth to the end of the year won’t be easy. There could be negative growth,” said Yao Jie, vice secretary general of CAAM.
The auto industry body said the drop was linked to sluggish consumer demand and the impact of a slowing economy. In previous months CAAM also said that the trade war with the US was impacting sales. CAAM had originally forecast a 3% rise for 2018, which is in line with last year’s growth. The curve was up 13.7% in 2016.
“Things don’t look good all the way to the end of the year, because of weakness in the market and the high base for comparison from last year,” said Yale Zhang, head of Shanghai-based consultancy Automotive Foresight. He is watching to see if car makers made a push to spur sales. “If the OEMs give up then sales volumes could be really bad.”
One bright spot was the sales of new energy vehicles, which include plug-in hybrids and electric vehicles. NEV sales were up 51% in October, which took YTD sales to 860,000 units – that’s 75.6% higher year-on-year.
Besides being a barometer of consumers’ willingness to shell out for big ticket items, China’s auto market – the biggest in the world – is also a major employer and economic growth driver.
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