Vehicle sector set to stabilize this year after tough 2019: analysts

By Chi Jingyi Source:Global Times Published: 2020/1/13 22:03:41

Aerial photo taken on July 9, 2019 shows Audi vehicles awaiting transfer at the parking lot of FAW-Volkswagen in Changchun, northeast China's Jilin Province. (Photo: Xinhua)

Auto sales in China fell last year, and the new-energy vehicle (NEV) sector contracted in terms of production and sales for the first time in a decade, industry data showed on Monday.

Analysts said that vehicle sales are expected to bottom out and stabilize this year, and last year's declines were normal as China's auto industry hit a plateau in 2018.

Vehicle sales last year fell 8.2 percent to 25.769 million, while output totaled 25.721 million, down 7.5 percent, according to figures released on Monday by the China Association of Automobile Manufacturers (CAAM). 

"China's automobile sector was under great pressure in 2019, with declines in both production and sales. But the industry as a whole remained within a reasonable range and is gradually improving," a spokesman for the CAAM said on Monday. 

The CAAM released its 2020 auto market forecast in December, which foresaw a 2 percent year-on-year decline in China's auto sales to 25.31 million vehicles.

"China's auto market has shifted from a fast-growing to quality-driven development model, as the industry reached a plateau in 2018 and the decline is normal. China remained the world's biggest auto manufacturer and consumer despite the declines," Feng Liguo, an expert at the China Enterprise Confederation, told the Global Times on Monday. 

The number of automobiles in the country reached 260 million in 2019, a year-on-year increase of 8.83 percent, according to data released by the Ministry of Public Security

"Ownership of 200 million private cars is still far from saturation, but the car ownership rate is not low, given China's different levels of urban and rural development," said Feng.

Last year, 1.206 million NEVs were sold nationwide, down 4 percent year-on-year. The production of NEVs stood at 1.242 million, down 2.3 percent.

Feng attributed the decline in NEV sales to immature NEV technology, including the long charging times compared with traditional energy cars.

Tian Yun, vice president of the Beijing Economic Operation Association, said that sales are expected to bottom out and stabilize this year.

"China and the US will reach a trade deal very soon, bringing temporary stability to the overall market," Tian told the Global Times.


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