Global car manufacturers cautious about China's market at the beginning of the new decade
BEIJING/SHANGHAI: Worldwide car manufacturers They are cautious about their possible sales in the Chinese vehicle market this year, the largest in the world, as it seems that pressures such as the slowdown in economic growth and trade frictions will continue.
Sales in China, where more than 28 million cars were sold in 2018, will contract again for the second time in a row. The country's leading industrial agency, the Association of Automobile Manufacturers of China (CAAM), said it expected annual car sales to fall 2% this year and will announce sales figures for the entire 2019 year later Monday.
Car manufacturers had enjoyed double-digit annual growth in China just four years ago before the brakes began with the contracting of sales in 2018, the first annual contraction since the 1990s. Hopes for a return to Growth in 2019 were later frustrated by the chaotic implementation of the new emission rules by local governments.
The prolonged sales crisis so far has led car manufacturers to consider closing capacity and firing staff. Senior executives such as Geely founder Li Shufu, president of Ford Motor Co partner, Chongqing Changan Automobile Co Ltd, Zhu Huarong, has said it expects a fiercer competition to eliminate the weakest players.
By 2020, bearish projections have come a long way from the tastes of General engines , China's second largest foreign car manufacturer, which reported a 15% drop in sales in 2019 last week.
We expect the market downturn to continue in 2020, and we anticipate winds against our business in China, said Matt Tsien, GM executive vice president and president of GM China.
Volkswagen Group, whose models of sport utility vehicles have helped it report a drop of less than 1.1% year-over-year in sales in the first 11 months of last year, has said it expects the market to grow at a relatively low rate to around 2023 and 2024.
Alan Kang, senior analyst at LMC Automotive, predicted a modest sales growth of 0.05% this year.
The negative effect of reducing the purchase tax in 2015-2017 has disappeared, and car sales in lower-level cities are expected to recover. The decline in trade tensions between China and the United States has also helped restore consumer confidence, he said.
The few companies that still enjoy growth have been mainly Japanese car manufacturers, according to the data.
Toyota Motor Corp sold about 1.62 million premium Toyota and Lexus cars in China last year, a 9% increase in sales compared to the previous year. Sales of Honda Motor Co in China also grew 8% year-on-year to a record 1.55 million cars.
Tesla Inc is also betting against sadness, as this month began delivering Model 3 vehicles made in China from its $ 2 billion plant in Shanghai. According to LMC Automotive, sales doubled in the first 11 months of last year to more than 38,000 units.