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China auto sales fall in 'Golden

September' as turnaround hopes
fade - Nikkei Asian Review
3 minutes

BEIJING/SHANGHAI (Reuters) -- Auto sales in China fell for a

15th consecutive month in September, data from its biggest
auto industry association showed, dampening hopes for a
second-half turnaround in the world's largest auto market.

Total auto sales fell 5.2% from the same month a year earlier
to 2.27 million vehicles, the China Association of Automobile
Manufacturers (CAAM) said on Monday.

This followed declines of 6.9% in August and 4.3% in July. Car

sales in 2018 declined from a year earlier, the first annual
contraction since the 1990s against a backdrop of slowing
economic growth and a crippling trade war with the United
States.

September and October, known as "Golden September, Silver

October" by China's auto insiders, are regarded as the high
season for sales, with customers traditionally returning to
make purchases after the summer.

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The association had previously said it expected sales in the

second half to improve, but that overall annual sales would fall
5% year-on-year to 26.68 million vehicles in 2019.

"Sales have risen in the second half but they have not hit
expectations and the pace has been slow," said Chen Shihua,
CAAM assistant secretary-general.

"Competition has become fiercer," said senior CAAM official

Xu Haidong, adding that independent Chinese brands, rather
than joint venture ones, were bearing the brunt of the sales
slide.

"It's become the survival of the fittest."

As recently as three years ago, automakers had enjoyed

double-digit annual growth in China.

Fifteen cities and provinces, which account for more than 60%
of car sales in China, implemented new vehicle emission
standards earlier than the central government's 2020 deadline,
damaging sales of traditional-fuel vehicles in particular,
according to CAAM, analysts, dealers and consumers.

Sales of new energy vehicles (NEV), which China has been a

keen supporter of, have also been impacted by subsidy cuts,
falling 34.2% in September following a 15.8% decline in
August, CAAM said. NEV sales had jumped almost 62% last
year as the broader auto market contracted.

NEVs include plug-in hybrids, battery-only electric vehicles

and those powered by hydrogen fuel cells. CAAM has said it

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expects sales of new energy vehicles to increase this year, but

at a slower pace to 1.5 million, down from a previous forecast
of 1.6 million.

The impact of the subsidy cuts on the NEV sector was set to
linger, Chen said. "I feel that there will be difficulties in
reaching the target in the following three months," he said.

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