Car Sales in China Fell 6% in 2018

January 09, 2019 at 10:02 AM

Retail demand for light vehicles in China dropped 6% to 22.7 million units in 2018, its first retreat in at least 20 years, says the China Passenger Car Assn.

The downturn catches carmakers with plans for more capacity and new models in anticipation of further growth. But the China Assn. of Automobile Manufacturers, which tracks factory production, predicts a flat market for as long as three years.

Both trade groups blame the market slump on China’s slowing overall economic growth and worries about the simmering trade war between the country and the U.S.

CAAM expects rising production of electrified vehicles this year will offset a downturn in output of conventionally powered cars. CPCA, which represents reports on retail sales, anticipates that new-car deliveries will rise 1% in 2019.

But Bloomberg News notes that some analysts expect China’s car market could shrink by as much as 7% in new car deliveries this year. The news service notes that economists have estimated that China’s overall economic growth will slow this year to 6.2% from 6.6% in 2018.