Chinese Auto Sales Record Worst-Ever Monthly Drop In May

The world’s single largest auto market, China, has reported its worst-ever monthly drop in auto sales, Reuters reports.

The China Association of Automobile Manufacturers (CAAM) revealed that sales in May 2019 tumbled by 16.4 per cent compared to the same month last year. This marks the 11th consecutive month of sales decline in the country and follows drops in sales of 14.6 per cent in April and 5.2 per cent in March.

The slowdown of the Chinese economy is partly to blame for the reduction in auto sales, as is the ongoing trade war with the United States. However, a new policy has also contributed to the falling sales.

Also Read: China Will Now Allow Used Car Exports To Boost Domestic Sales

According to CAAM assistant secretary general Xu Haidong, a number of provinces have implemented the ‘China VI’ vehicle emission standards ahead of the central government’s 2020 deadline, which caught some car manufacturers off guard. Xu also says that a decline in purchasing power among low-to-middle income groups across the country and expectations of government stimuli to encourage purchases have also contributed to reduced demand.

It’s not just ICE vehicles that are experiencing a downturn in sales, though. Growth in the new energy vehicle segment is also declining; in May, sales only grew by 1.8 per cent cent, significantly less than the 18.1 per cent growth recorded in April. Xu asserts this is because of a decline in sales of commercial vehicles like buses and sharp discounting on petrol-powered cars prompted by stringent emission standards.

Passenger vehicle registrations in China fell by 5.8 per cent last year to 22.35 million and are expected to fall further this year. Which, given the country’s importance in the grand scheme of things, does not bode well for automakers…