Ford, GM, Jaguar, Land Rover and Volkswagen suffer big declines in world’s largest market.
China has posted a 11.6 per cent decline in new vehicle sales for the month of September – with a sales figure of 2.4 million units – marking the third month in a row the market has fallen year-on-year.
A new report by BBC News attributes the decline to a slowing Chinese economy, something being felt by vehicle manufacturers around the world.
Ford was dealt with one of the biggest hits, falling 43 per cent compared to September 2017. General Motors (GM), Jaguar Land Rover (JLR) and Volkswagen also reported steep declines – JLR in particular posted a 46 per cent slide, contributing to its decision to close its Solihull facility for two weeks at the end of October.
According to BBC News, analysts are predicting 2018 could be the first time since at least the 1990s China’s vehicle market contracts, however, the China Association of Automobile Manufacturers (a government-backed industry body) still expects growth for the full year.
Michael Dunne, CEO of ZoZo Go, an investment advisory company focused on China’s vehicle market, said the trend poses a real issue for vehicle manufacturers, which are looking to the nation as the world’s ‘next great market’.
“Growth and profits are at stake and they’ve come to expect them from China,” he told the British publication.
For example, GM and Volkswagen rely on China for roughly 40 per cent of their global sales volume. Each posted a year-on-year decline in September, 15 per cent and 11 per cent respectively.
It’s not all doom and gloom, though. Geely Automotive Holdings, one of China’s largest car companies, managed “about 122,000” vehicle sales last month, which is a 14 per cent on September last year. However, thats about 1.0 per cent on August and much smaller growth than earlier months this year.
China’s economic growth is expected to post a figure of 6.6 per cent for 2018, 0.3 per cent down on the previous year, according to the International Monetary Fund.
Furthermore, the firm’s forecast for 2019 is that the country’s growth will slow again to 6.2 per cent, citing trade issues between China and the US as each nation raise import tariffs on imported goods from each other.
MORE: China coverage