China auto sales fall in November for fifth month
A painful contraction in China's auto market deepened in November as sales fell for a fifth month amid an economic slowdown and consumer anxiety over a tariff fight with Washington.
Sales of SUVs, sedans and minivans in the global industry's biggest market plunged 16 per cent from a year ago to just under 2.2 million, an industry group, the China Association of Automobile Manufacturers, reported Tuesday.
Sales for the 11 months through November were down 2.8 per cent from a year earlier at 21.5 million. That puts annual sales on track to shrink for the first time in three decades.
The slump is a setback for global automakers that look to China to drive revenue and are spending heavily to meet government targets to develop electric vehicles.
China's economy is forecast to grow by about 6.5 per cent this year, down slightly from last year's 6.7 per cent. But that is propped up by higher government spending on public works construction that helps to mask weakness in real estate sales and other areas that weighs on consumer confidence.
The downturn in auto demand has accelerated steadily.
November's sales decline was worse than October's 13 per cent contraction, which was sharper than September's 12 per cent decline.
Demand was expected to weaken after Beijing tightened lending controls last year to cool a debt boom. But the slump is sharper than forecast, fuelling expectations that regulators will cut sales taxes or take other steps to shore up demand.
China is a top market for General Motors Company, Volkswagen AG and other industry majors that look to increasingly prosperous Chinese customers to drive revenue growth. They are spending billions of dollars to develop models to appeal to local tastes.
They face rising competition from young but ambitious Chinese rivals, including electric brand BYD Auto, Geely Auto and SUV maker Great Wall Motor.
Automakers are rolling out dozens of electrics but depend on gasolene-powered models for their profits.
Chinese domestic brands that had been expanding their market share with lower-cost SUVs and sedans suffered an even bigger decline in November.
Total sales by Chinese brands fell 23.3 per cent to 909,000 vehicles, worsening from October's 18 per cent contraction.