According to the China Economic Review, after years of consistent market growth, China has begun to struggle within its domestic auto industry. The three months from June 2018 to September 2018 was responsible for being the worst quarter in more than a decade for China’s vehicle industry.
Wholesale delivery of passenger cars fell 7.7% year-on-year throughout the quarter, suffering a 12% decline in September alone. Additionally, Chinese auto sales fell 9.1% in the quarter compared with a year ago. From 2008 to 2017, the market was doing quite well; with year-on-year vehicle sales increasing at an average rate of 14%.
Across the Pacific Ocean, United States used vehicle sales have actually been on the rise for seven consecutive years.
China’s entire auto industry — as well as other important sectors — is experiencing all kinds of financial concerns. As of late October 2018, China’s gross domestic product (GDP) grew 6.5% in the third quarter, the lowest figure in a decade.
“The automotive industry has been a driver of China’s economic growth for years,” said Xu Haidong, assistant secretary at China Association of Automobile Manufacturers (CAAM). “Now it is pulling back.”
Despite its recent struggles, China hopes to significantly bounce back and is looking to the electric vehicle (EV) sector for assistance.
According to the South China Morning Post, China’s leading electric car manufacturer, BYD, produces a new electric vehicle every 90 seconds. Additionally, sales of electric vehicles reached 770,000 units last year, which is more than half of all new-energy automobiles sold across the globe.
“To become a world leader in terms of technologies is not an easy job,” added Peter Chen, a Shanghai-based engineer with TRW. “Given the huge market size in China, EV is certainly a key industry where the government wants to develop its own players to be world leaders.”