Biz / Auto

Carmakers gloomy on 2019 outlook

Chinese automakers are forecasting conservative sales targets for 2019 in a challenging market, investment bank UBS said on Tuesday.
Reuters

People select automobiles at a second-hand market in Shenyang in file photo. UBS forecast conservative sales for Chinese automakers on Tuesday.

Chinese automakers are forecasting conservative sales targets for 2019 in a challenging market, investment bank UBS said on Tuesday.

“China’s auto industry faces challenges such as high inventory levels and overall car sales may not be so good in the short term,” said Paul Gong, China auto analyst at UBS Investment Research.

“Total vehicle sales are expected to begin to pick up after the second quarter of this year.”

Gong attributed lackluster sales in 2018 to the macroeconomic environment, a falling stock market and weak consumer confidence.

“Last year, the fall in sales was beyond our earlier expectations,” Gong said.

The China Association of Automobile Manufacturers says that in the first 11 months of 2018, total sales fell 1.7 percent from the same period a year earlier, to 25.42 million vehicles. In November, sales fell 13.9 percent year on year to 2.55 million vehicles. Analysts forecast December sales will show a continued decline.

Gong said some factories are likely to close this winter and some dealerships in second-tier and third-tier cities may close after the Spring Festival.

Despite a slack performance in the overall market, sales of electric cars maintained strong growth, boosted by government policies to support new energy vehicles.

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