China’s top auto body said on Monday that the automakers in the country will have to start getting used to low speed growth as the country is predicted to go through crisis and face shrinkage in sales for the third consecutive year in 2020.
The China Association of Automobile Manufacturers witnessed a fall of 8.2% in vehicle sales as the country was under pressure due to import tariffs with United States and new emission standards. They expect a fall of 2% in vehicle sales this year.
CAAM has confirmed its forecast last month and mentioned that auto sales have declined for the 18th consecutive month in December. The annual sales halted the growth march that started in 1990s by 2.8% in 2018. However, the industry watchers are expecting recovery in sales in lower-tier cities and relief in tension between China and the United States.
Shi Jianhua, CAAM’s senior official said that the high speed development stage has drifted, bringing reality of low speed development. We had the privilege of experiencing high speed growth for 28 consecutive years, so for now everyone can calmly look at the market.
Sales of NEV (new energy vehicles) descended 27.4% in December which resulted in 4% overall decline to 1.24 million units during 2019. Sales of NEV had jumped by 62% during 2018 but subsidy cut had impacted sales last year.
Xu Haidong, CAAM’s assistant secretary general said that China’s industry ministry in 2017 had set the target of achieving 2 million NEVs by this year however, it doesn’t seem like an accomplishable goal yet. The sales of NEV is predicted to slight increase compared to last year or stay plateaued.