China’s car sales declined for the 12th consecutive month, a historic slump that’s left manufacturers reeling as trade tensions and economic worries weigh on consumer sentiment.
Retail sales of sedans, sport utility vehicles, minivans and multipurpose vehicles fell 12.5 percent to 1.61 million units in May, the China Passenger Car Association said.
The unprecedented slide has hit local brands particularly hard, though market leader Volkswagen AG has also seen its sales wane this year. While China this month unveiled a stimulus plan to help spur car demand, the policies don’t include any new spending from the central government and were met with doubts that they are enough to revive sales.
“It is a pretty difficult time for the auto industry,” Cui Dongshu, secretary general of PCA, said.
Sales by Chinese brands fell 26.5 percent last month, while deliveries of premium cars rose 9.4 percent, he said. The first week of June showed a “slight” increase in total sales from a year earlier after dealerships slashed prices to lure buyers, he said.
Shoppers have stayed away from showrooms as economic woes and sputtering stock prices weighed on their purchasing power. The rising popularity and availability of car-sharing and ride-hailing services is reducing the need for individuals to buy vehicles.
The market that global carmakers have relied on for growth since the 1990s now risks an extended decline, raising questions about the companies’ expansion plans in China. Global manufacturers have invested billions of dollars in the hope that the world’s biggest market will keep growing even as vehicle demand in Europe and North America wanes.
Sales of Volkswagen-branded cars have fallen 8 percent in China this year through April, according to LMC Automotive.
General Motors’s Buick and Chevrolet have also declined, while Mercedes-Benz, BMW, Honda and Toyota have advanced, according to the researcher. Local brands Baojun, Dongfeng and Trumpchi are among those hardest hit, with their sales declining 40 percent or more over that span, according to LMC.