SHANGHAI – The slowing domestic economy has caused sales of new light-vehicles including sedans, crossovers, SUVs, multi-purpose vehicles and microvans in China to decline non-stop for 15 months.
And in the past few months the weakening economy also has chilled demand for new pickups and used light-vehicles -- making it harder for the overall market to recover any time soon.
Sales of new pickups stayed robust in China from 2016 to 2018, as more domestic cities started to deregulate control on pickups used locally at the request of the central government.
Previously, most Chinese cities banned use of pickups for private purposes on the grounds that these vehicles would aggravate traffic congestion and air pollution.
Last year, some 450,000 pickups were delivered across the country, advancing 12 percent from 2017, according to China Pickups, a Beijing-based website covering the domestic pickup market.
But in May, pickup demand turned south and has since kept slipping. In September, pickup deliveries in China dropped 6.0 percent from a year earlier to below 27,000.
Sales of used vehicles, most of which are second-hand light vehicles, have maintained growth since 2012.
In 2018, more than 13.8 million used vehicles were delivered across China, rising 11 percent from a year earlier.
While the volume has yet to be disclosed for September this year, the August number shows used vehicles sales were fast running out of steam.
In August, sales growth of used vehicles in the country slowed to 0.9 percent year on year from 6.7 percent in July, according to the China Automobile Dealers Association.
And due to weak August sales, accumulative used vehicle deliveries for the first eight months only gained 3.9 percent to 9.3 million units.
The lone bright spot
Currently, the only bright spot in China’s light vehicle market is the luxury segment.
Except for Cadillac and Audi, other global luxury brands including Mercedes-Benz, BMW, Lexus and Volvo all sustained sales increases in September.
But, hit by U.S. President Donald Trump’s tariffs and faced with internal problems -- such as rising corporate debts, weakened small and medium enterprises and Beijing’s ongoing environment protection campaign -- China’s economic growth slowed to 6.2 percent in the second quarter of this year from 6.4 percent in the first quarter.
The Chinese economy will end 2019 with a growth of 6.1 percent, down from 6.6 percent in 2018, the International Monetary Fund predicted this week.
If the economic growth keeps losing steam at such a fast pace, demand for luxury car sales, which have remained resilient so far, will be inevitably affected.