Company/Industry dynamics

China’s auto sales fall sharply in January; policy boost expected

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Source:Global Times Published: 2019/2/18 15:43:14

Auto sales in China declined 15.8 percent year-on-year in January, pointing to serious sales trouble for the world's largest auto market amid persistent downward pressure in the country's economic growth, industry data showed on Monday.

In the first month of the year, total auto sales fell to 2.37 million units, marking the seventh consecutive month of falling sales in the country, according to data from the China Association of Automobile Manufacturers (CAAM).

The worst sales declines were seen in the passenger vehicle segment, which accounts for a vast majority of total auto sales. In the month, sales of passenger cars dropped 17.7 percent year-on-year to 2.02 million units, following 15.8 percent and 16.1 percent declines in December and November 2018, according to the CAAM.

Once a bright spot in the global auto market with rapid growth in sales, China's auto market saw negative growth in 2018, with total sales down 2.8 percent year-on-year, CAAM data showed. That followed 3.4 percent year-on-year growth in 2017 and 13.65 percent rise in 2016, CAAM data showed.

The decline in car sales has also weighed on the country's total consumption, a key driving force of economic growth, according to officials. "Cooling car sales have become a major factor in dragging down growth in consumption," Liu Yunan, a senior official with the National Development and Reform Commission (NDRC), said at a press conference on January 29.

In 2018, total retail sales grew 9 percent year-on-year, but there were some "fluctuations" in the growth pace, according to Liu.

As part of a broad push to stabilize growth in the world's second largest economy, China's top policymakers have in recent months moved to stabilize consumption, including car sales. 

On January 29, the NDRC, along with nine other agencies, released a set of policy measures to boost consumption, including several aimed at increasing car sales. 

Among others, the agencies called for speedily phasing out old vehicles, optimizing subsidies for new-energy vehicles, easing restrictions on pick-up trucks in cities and on car purchases and boosting the second-hand auto trading.

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