More action needed to boost car sales in China

Published: August 21, 2019
A car manufacturing plant. PHOTO: AFP

A car manufacturing plant. PHOTO: AFP

BEIJING: Officials at China’s leading auto industry association are calling for local authorities to implement the central government’s guidelines for boosting car demand in the wake of a drop in vehicle sales in the country for 13 months in a row as of the end of July.

Overall vehicle sales in the world’s biggest vehicle market stood at 1.8 million in July, falling 4.3% from the same month last year, according to the China Association of Automobile Manufacturers (CAAM). Total sales in the first seven months of this year came in at 14.13 million, down 11.4% year-on-year. The association expects the fall to become less severe in coming months because of a lower comparable base figure from the second half of last year and because of the measures implemented to help with car sales.

It estimated that China’s vehicle sales would drop 5% this year from 2018 to 26.68 million vehicles. It has also trimmed its forecast for a rise in new energy vehicle sales to 1.5 million from the forecast of 1.6 million made at the start of the year.

“However, we haven’t seen many local governments come up with specific measures to implement the guidelines,” said Xu Haidong, Deputy Secretary-General of CAAM, when the association released the latest sales figures last week.

Since January, the central government has been trying to boost demand for a wide range of goods including vehicles, asking local authorities to offer subsidies or other forms of assistance and more importantly ease restrictions on purchasing and using vehicles, especially new energy vehicles. “If you closely examine potential customers, you will find that those who want to buy cars and can afford them are residents living in cities where licence plates are rationed,” said Xu.

This article originally appeared on the China Economic Net 

Published in The Express Tribune, August 21st, 2019.

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