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SHANGHAI: China鈥檚 automobile sales in January tumbled 15.8 percent from a year earlier, the country鈥檚 top auto industry association said on Monday, as the world鈥檚 largest auto market hits the skids with the slump in sales extending to the seventh month.
China鈥檚 Association of Automobile Manufacturers (CAAM) said in an emailed statement to Reuters that sales dropped to 2.37 million vehicles last month. This follows a 13 percent drop in December and a 14 percent fall in November.
鈥淐ar sales in January continued to decline, and there was no sign of improvement. We estimate that February wholesales will also drop sharply鈥� said Xu Haidong, CAAM assistant secretary general.
鈥淭he reason for the sales drop is still the slowing overall economy, and consumption decline in small and medium-sized cities鈥� Xu said.
China has been grappling with slowing economic growth as well as the fallout of trade frictions with the United States, forces which contributed to its auto market contracting for the first time in more than two decades last year.
Beijing is now trying to persuade consumers to loosen their purse strings and has pledged to provide subsidies to boost rural sales of some vehicles and purchases of new energy vehicles.
鈥淨1 sales were good last year, so this year the industry expects to have negative growth in the first quarter鈥� Yale Zhang, head of consultancy AutoForesight, said, but he predicts sales to gradually pick up in the next three quarters.
Industry executives also say China鈥檚 car sales in January and February tend to be affected by the Lunar New Year holiday, as consumers hold off on their car purchasing decisions around the festival.
The holiday鈥檚 dates change annually but tend to occur in either month. It took place in the first week of February this year.
China鈥檚 sales of new energy vehicles, however, continued to buck the trend, totaling 95,700 in January, a year-on-year increase of 140 percent, CAAM said.