China car sales drop for 5th consecutive month

By BLOOMBERG

BEIJING • Car sales in China declined for a fifth consecutive month, bringing the world’s largest market closer to its first annual drop in at least two decades and piling pressure on carmakers that have relied on the country for growth.

Retail sales of sedans, MPVs and SUVs dropped 13.2% to 1.98 million units last month, the China Passenger Car Association said yesterday.

Sales in the first 10 months of 2018 fell 2.5% to 18.4 million units.

This ups the pressure on automakers already pinning flagging profits and weaker sales growth on the pullback in China.

Even Volkswagen AG, the top carmaker by sales volume there, cut its China forecast as the trade war hits the economy and demand for big-ticket consumer items like cars.

The slowdown coincides with China’s new emission rules that force carmakers to boost spending on electrified vehicles to avoid penalties. Spending requirements are further exacerbated by a seismic shift in the industry toward self-driving features and fully autonomous cars.

Deliveries of vehicles to dealerships amounted to 28.9 million units last year, rising 3% from 2016.

Toyota Motor Corp and Daimler AG are among the few companies that have managed to maintain sales growth in China this year, helped by demand for SUVs and premium autos such as Toyota’s Lexus line.