Auto sales down for 12th month
China’s auto sales fell 9.6 percent from a year earlier to 2.06 million vehicles in June, the 12th consecutive monthly decline, according to data released by the China Association of Automobile Manufacturers on Wednesday.
The association said sales and production in the country's automobile market in the first six months was below what had been expected at the start of the year.
It also said China's auto sales are expected to decline for the whole year and it urged government policies to promote consumption to be implemented as soon as possible.
Overall auto sales declined 12.4 percent to 12.32 million vehicles in the first half of the year compared with the same period last year, the data showed.
In January, the association forecast that 2019 sales would be flat at around 28 million. China's auto market fell 2.8 percent in 2018 from a year earlier to 28.1 million units.
"Market sentiment has not been improved despite sales promotions for some car models. Consumers took a wait-and-see stance when buying vehicles," the association said.
Industry insiders also attributed the sales decline to reasons including macroeconomic factors and increased housing costs leaving less money to spend on cars.
Industry analysts earlier estimated that sales in June would be relatively good, driven by sales promotions. Some dealers had promotions to clear out models built with China V emission standards as some regions adopted the stricter China VI standards from July. In addition, some dealers offered promotions in June as they wanted to perform well in the half-year assessment.
However, the association's data showed that overall auto sales continued to decline in June.
Cui Dongshu, secretary-general of the China Passenger Car Association, said that "after a difficult situation in the first half of this year, carmakers need to adjust their annual sales target. Some manufacturers made promotions in May and June, which leads to a frontloading effect for car sales in the second half."
Cui said that consumers still hesitate when buying vehicles and car dealers are making adjustments in July. From August, the automobile market will see an improvement, Cui added.
Lin Huaibin, manager of China Light Vehicle Sales Forecast with IHS Markit, said, "Monthly sales volume in June seems to be improving while dealer inventory is also declining. Market could trough out from July onward given the lower sales base in the second half of 2018. Trade truce could also provide tailwind although we would still remain cautious as uncertainty may unsettle growth unexpectedly in the short term."
Sales of new-energy vehicles, however, are still booming, with an 80 percent jump in June to 152,000 vehicles. In the first half of the year, sales of green cars rose 49.6 percent from a year earlier to 617,000 vehicles.
Electric vehicles accounted for around 79 percent of new-energy vehicle sales, rising 56.6 percent year on year to 490,000 units. Sales of plug-in hybrids rose 26.4 percent to 126,000 vehicles. Sales of fuel-cell vehicles totaled 1,102 units in the first six months.
Sales of passenger cars accounted for about 82.1 percent of total vehicle sales, with 10.12 million units sold in the first half of this year. Commercial vehicles took up the remaining 17.9 percent, with 2.2 million units sold.
In the first half, sales of sports-utility vehicles fell 13.4 percent from a year earlier to 4.3 million units. Sedan sales declined 12.9 percent to 4.96 million units. Multi-purpose vehicle sales dropped 24 percent to 670,000 vehicles.
Chinese carmaker Geely sold 651,680 vehicles in the first six months, a decline of about 15 percent year on year. The company said it achieved 43 percent of the group’s full-year sales volume target of 1.51 million units in 2019. Geely said the amount of net profit for the first half of this year is expected to decrease by about 40 percent compared with the 6.67 billion yuan in the same period last year.
Porsche sold a total of 42,608 vehicles in China, achieving growth of 28 percent in the first six months, according to the data from the company.
BMW sold 350,070 BMW and MINI-branded vehicles in China in the first half of 2019, up 16.8 percent year on year.