Nov 21, 2018 (China Knowledge) - Car sales in China fell by 12% to 2.4 million in October, marking the first time the Chinese auto-market recorded negative growth since 2000. Auto sales for the month of November and December this year are also expected to continue to fall due to the strong performance of the auto-industry during the same period last year which will be difficult to surpass.
The auto industry in China has been expanding rapidly over the past few years and the recent slowdown was not unexpected as it is inevitable for growth rates to eventually fall and low growth may become the new normal.
The weak auto market can be attributed to several reasons such as economic fluctuations, macroeconomic slowdown, the on-going trade war as well as the country’s poor performing stock market and property market. All these factors have contributed to a lowered consumer appetite for new vehicles.
Car sales was estimated to reach 35 million annually by 2025, but with the current outlook, this number may be reduced to just 30 million a year. Using projected sales of 30 million vehicles annually in 2025, this would mean a 2% annual growth rate.
Despite the slower progress, car ownership rates in China are at a still, now, and the industry has the potential to continue growth. The car ownership rate in China currently stands at 15.6% and the auto market has yet to hit its ceiling.
Nearly 70% of listed carmakers, in June this year, have recorded lower net profits.
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