New data released by the China Association of Automobile Manufacturers on Monday has confirmed previous speculations regarding the continued decline in China's overall car sales. Last year marked the second consecutive year of shrinking car sales in China, with total car sales dropped by 8.2 percent when compared to the previous year.
According to the data released by the national auto industry body, total car sales recorded in 2019 was just under 25.8 million units. This was lower than the number of sales recorded in 2018, which was 3 percent lower than the year before. 2018 was the first decline in total car sales in the country since the 1990s.
The drop in the country's total car sales last year was already foreshadowed by the recorded drops in month-on-month sales since the beginning of the year. December car sales in the country showed a continued dip, marking the 18th straight month of decline.
Analysts have mentioned that the decline in car sales in China last year was greatly exacerbated by the ongoing slump in economic growth and the yet-to-be resolve trade dispute between the country and the United States.
Another factor that has contributed to the decline is the country's ramp-up of tougher emission standards, which were introduced last summer. Consumer spending last year for automobiles was also lower-than-expected as most have held back on big-ticket purchases amid the uncertain market conditions.
More or less of the same outcome is expected for this year. Analysts are expecting an average decline of 2 percent in the country's car sales for 2020. Most carmakers have agreed with the prediction, stating that there are still major headwinds on the horizon that will affect sales in the coming months.
Ford, which experienced a 26 percent drop in its Chinese car sales last year, has warned its stakeholders of tougher times ahead. The company's CEO of Ford Greater China, Anning Chen mentioned in a press statement that they expect the downward trend in the industry to continue this year. GM has echoed its rival's sentiment, with the company's car sales experiencing a drop of 15 percent for 2019.
Analysts from brokerage firm Jefferies mentioned in a report last week that China's car market in 2020 could be in for an even tougher year as manufacturers face stricter emission regulations, lower subsidies, and the general disruption of the adoption of newer technologies. China has long been pushing for the rapid adoption of so-called new energy vehicles, putting added pressure on industry players.
