China’s passenger car fell for the 13th month in a row in July and in a worrying development, sales of new energy vehicles (such as electric-powered cars) fell for the first time in two years.
In July, overall car sales dropped 4.3% from a year ago to 1.8 million units, the 13th consecutive monthly decline.
Passenger vehicle sales dropped 3.9%,
The seven-month figures showed that sales of new energy passenger vehicles in China soared 53.7% year-on-year to 645,000 units.
But the month of July told a very different story as buyers were again hesitant to commit.
Sales of NEVs such as electric cars fell 4.7% in July from a year earlier to 80,000 units, the first drop since January 2017. (The figures are based on deliveries to car dealers, not actual sales to buyers)
Chinese automakers produced 65,000 purely electric cars in July, down 4.8% year-on-year, while sales of electric cars rose 1.6% to 61,000.
But offsetting that small rise, production of plug-in hybrid cars were down 13.2%, and sales fell 20.6%.
The Industry Association blamed the fall on falling subsidy policies for NEVs.
China’s auto market had the first annual contraction last year in nearly three decades and has continued shrinking this year.
Against that background, it’s no wonder many foreign car companies are looking at rising losses from China as some of their factories remain underutilised.
China’s industrial production, retail sales and investment (especially for real estate and property) will be out later today.