BOFIT Viikkokatsaus / BOFIT Weekly Review 2018/44
Sales figures for China’s automobile industry indicate that passenger car sales in the third quarter declined compared to a year earlier. Sales were down by 12 % y-o-y in September. At the same time, profits of car manufacturers has also fallen sharply.
China is the world’s largest car market. Sales currently are running at about 25 million new cars a year. Sales in the number-two US are about 17 million cars a year. Chinese sales growth has been sluggish this year, however, with total sales over the past twelve months in September on par with a year earlier. Foreign makes, which are mainly produced and assembled in China, account for 60 % of domestic car sales.
Car production growth also has plateaued. Some 25 million cars are manufactured in China each year, with about 700,000 vehicles exported. China imports about 1 million cars a year.
The flagging car sales trend reflects changes in household demand in China. Moreover, different kinds of fixed-term subsidy schemes for car buyers and changes in taxation have caused fluctuations to car sales. Recent news reports say the government is planning to lower the tax on car purchases to support car producers and economic growth.
Despite the slowdown in car sales, growth in sales of electrical cars has risen rapidly. China accounts for about half of global sales of plug-in electric vehicles (fully electric and plug-in hybrids). In the third quarter, plug-in electric vehicles accounted for about 5 % of new cars sold in China.
China’s passenger car production, exports and imports
Source: CEIC.