China's auto sales face more bumps ahead, industry body warns

reuters.com Production & Sales 2019-09-11 18:43:38

China's auto sales could experience negative to low growth over the next three years, an official with the country's top industry association said, after sales fell for a 14th consecutive month in August.


The number of new energy vehicles (NEVs) sold contracted for the second month in a row, data from the China Association of Automobile Manufacturers (CAAM) showed.


Total auto sales fell 6.9% from the same month a year earlier to 1.96 million, CAAM said on September 11. This followed declines of 4.3% in July and 9.6% in June.


"The sales in the second half of the year should become better, but we are not sure to what extent the sales would be," Shi Jianhua, senior official at CAAM said.


"Perhaps the next three years will be at a low or small negative growth. We're all looking forward to sales picking up, but it's normal if we don't get that," he said, adding the key reason for the poor outlook was low consumer confidence amid an economic slowdown and trade tensions with the United States.


As recently as three years ago automakers had enjoyed double-digit annual growth in the world's largest auto market, before the brakes came on with the first annual contraction since the 1990s last year.


Sales of new energy vehicles fell 15.8% in August, CAAM said, following a 4.7% fall in July - their first decline since January 2017. NEV sales jumped almost 62% last year even as the broader auto market contracted.


NEVs include plug-in hybrids, battery-only electric vehicles and those powered by hydrogen fuel cells.


China has been a keen supporter of NEVs and has brought in sales quota requirements for automakers.


"Due to the impact of subsidies cut on new energy vehicles, sales for new energy vehicles continued to drop," Chen Shihua, assistant secretary general at CAAM, said.


CAAM said in July it expected auto sales to fall 5% year-on-year to 26.68 million vehicles in 2019.


It still expects sales of new energy vehicles to increase, but at a slower pace to 1.5 million, down from a previous forecast of 1.6 million.


China has been trying since January to boost consumption of a range of goods as the world's second-biggest economy slows further amid a trade spat with the United States characterized by tit-for-tat import tariffs.


"We expect these measures will promote the consumption of autos in China," Chen said.


The implementation of new vehicle emission standards earlier than the central government's 2020 deadline by 15 cities and provinces, which account for over 60% of car sales in China, spooked buyers too and hurt sales - particularly of traditional-fuel vehicles - according to CAAM, analysts, dealers and consumers.


The prolonged sales decline has made local carmakers such as Geely Automobile Holdings Ltd (0175.HK) and Great Wall Motor Co Ltd (601633.SS) cut expectations for sales and profit.


The decline has also prompted some global names including Peugeot SA (PEUP.PA) to close plants and adjust workforce.


China is also re-instituting an additional 25% tariff on U.S.-made vehicles and 5% tariffs on auto parts that had been suspended at the beginning of the year. Carmakers such as Daimler AG (DAIGn.DE) and Tesla Inc (TSLA.O) had adjusted their prices in China when the auto and auto parts tariffs were suspended.


(Writing by Emma Yang  Editing by Harry Huo)
For any questions, please contact us by inqury@fwenergy.com or +86-351-7219322.

Share this article
Connect with us

Editors Recommendations

1 Asia coal sheds gains on demand concerns 2019-09-20

Asia-Pacific benchmark coal prices have shed most of this week's gains as concerns about waning demand began to reassert themselves against September 16's spike in oil prices. Global Coal

2 How much of China's 2019 coal import quota is left? 2019-09-20

The Chinese government has intensified administrative measures to control coal imports since 2017, issuing import quotas to individual customs and major importers. The country's coal imports remain

3 Chinese import thermal coal expected to stabilize ahead of holiday 2019-09-20

Chinese import thermal coal market is expected to wind down before the 7-day National Day holiday that starts from October 1, with buying interest fading away from end buyers and traders.

4 Port trading activity stays sparse in China thermal coal market 2019-09-20

Trading activity of spot thermal coal stayed sparse at northern Chinese transfer ports, as power plants still showed tepid buying appetite although their coal stockpiles dived to a four-month low.

5 U.S. natural gas futures dive nearly 4% on big storage build 2019-09-20

U.S. natural gas futures fell almost 4% on September 19 as a bigger-than-expected storage build and forecasts for less cooling demand next week knocked prices further off their highest in nearly five

6 China Coal Daily Track (Sep 19) 2019-09-19

Thermal coal Production area Coal supply is shrinking affected by explosive devices ban in Inner Mongolia, stricter control on coal sales invoices in Ordos of Inner Mongolia and Yulin of Shaa

7 Top 3 provinces contribute 70.2% of China's Jan-Aug coal output 2019-09-19

China's three largest coal bases – Inner Mongolia, Shanxi and Shaanxi – produced 1.69 billion tonnes of raw coal in the first eight months this year, taking 70.2% of the country's total, showed data

8 Mongolian coal exports notch a record high in Aug 2019-09-19

Mongolia exported a record high amount of coal to its main destinations, in August, showed data from the National Statistics Office of Mongolia, supported mainly by larger shipments to China.

9 World's 1st stainless steel futures will be listed in Shanghai Futures Exchange 2019-09-19

The world's first stainless steel futures will be traded on September 25 in the Shanghai Futures Exchange (ShFE), which will further enhance China's pricing influence in the international stainless st

10 China spot thermal coal demand remains dull; Oct outlook diverges 2019-09-19

Buying demand for spot thermal coal cargoes stayed dull at northern China ports, even after expectations on a potential supply shortfall were reinforced by news of production curbs in coal-rich Ordos

Most Read Articles

1 China coal output slows down in Aug, but still at a high level 2019-09-16

China's raw coal production slowed down in August, with the year-on-year growth decelerating to 5% from 12.2% a month earlier, but remained at a relatively high level, statistical data showed.

2 How much of China's 2019 coal import quota is left? 2019-09-20

The Chinese government has intensified administrative measures to control coal imports since 2017, issuing import quotas to individual customs and major importers. The country's coal imports remain

3 Spot thermal coal trades remain in doldrums at China Bohai-rim ports 2019-09-16

Trading activity of spot thermal coal remained in the doldrums at Bohai-rim ports in northern China late last week, although coastal utilities' coal stocks dropped alongside strong consumption.

4 Indonesian thermal coal prices keep firm in pre-holiday Chinese market 2019-09-16

Indonesian thermal coal prices maintained small rises in Chinese seaborne import market late last week ahead of the Mid-autumn holiday, bolstered by intensively-unleashed demand from Chinese utilities

5 Shanxi coking coal prices softening; Mongolian coal supply stable 2019-09-16

Coking coal market kept weakening in northern China's Shanxi province in the past week. Prices of both primary and blending coking coal were weighed down by sliding demand from coke producers, pointin

6 China to order industrial output cuts to combat winter toxic air 2019-09-19

China will implement a half-year environmental check starting October 1, accompanied by production cuts at key polluting industrial industries, as Beijing looks to lighten the toxic smog that chokes m

7 China regional curbs on thermal coal output may support spot market to gain 2019-09-18

Market talks about coal production curbs in Ordos, a major coal city in Inner Mongolia, have fanned bullish sentiment toward the near-term spot thermal coal market at northern ports. Sour

8 Vietnam Aug coal imports hit record high 2019-09-16

Vietnam's coal imports hit a record high in August, showed data from Vietnam customs, buoyed by surging domestic demand, especially in industrial sector. Total coal imports came in at 4.8

9 China's longest heavy-haul coal railway Haoji to open to traffic next week 2019-09-18

Haoji railway, China's longest heavy-haul coal railway spanning 1,814.5km from northern to central and eastern areas, is scheduled to go into operation on September 24, reported Jiangnan City Daily ba

10 China's slowdown deepens; industrial output growth falls to 17-1/2 year low 2019-09-16

The slowdown in China's economy deepened in August, with growth in industrial production at its weakest 17-1/2 years amid spreading pain from a trade war with the United States and softening domestic

Scan to download sxcoal.com mobile APP

X