Volvo builds XC60 SUVs at its plant in Chengdu, China. Sales of new vehicles in the country declined again in November.
China’s auto sales continue to slump as the world’s largest market saw sales drop for the 17th month in a row. In November, new energy vehicles (NEVs) also fell for the fifth straight month.
Overall, the China Association of Automobile Manufacturers, said the country’s vehicle sales slid 3.6% compared with year-ago results. Sales fell 4% in October and 5.2% in September, the group noted.
However, new car sales fell even more by 5.4%, the group revealed. The most recent results were a small improvement compared with October’s 5.8% slide. The prolonged slump portends a second consecutive year in which sales will decline, which hasn’t happened since the 1990s.
(U.S. new vehicle sales rise in November)
“The China 5-6 emission standard change is the biggest reason for this year’s sales plunge,” said Chen Shihua, deputy secretary general at CAAM. The emission change refers to local governments accelerating changes to emission standards this year.
There may be some brighter news on the horizon though. Shihua noted overall car production levels were now returning to normal and automakers were expanding their product line-ups with new models in the recent months.
Sales in China are expected to decline for the second year in a row after another slide last month..
November saw sales of NEVs fall 43.7%, CAAM said. The decline follows a 45.6% drop in October. NEV sales had jumped almost 62% last year even as the broader auto market contracted. NEVs include plug-in hybrids, battery-only electric vehicles and hydrogen fuel cell-powered vehicles.
In the past, China’s thrown its weight behind NEVs and mandating sales quotas for automakers, offering buyers incentives to ensure the minimum target numbers were met.
However, the government has cut the subsidies this year, planning to phase them out due to criticism that buyers have become trained to only buy NEVs with the financial inducements. In turn, buyers have turned away from the NEVs because they cost more now.
“Next year there will be different NEV manufacturing quotas for carmakers. I think next year will also be an adjustment period and sales of new energy vehicle will be better than this year,” said Xu Haidong, assistant secretary general at CAAM.
(China’s annual NEV sales trending for decline in 2019)
For the 11 months through November, electric vehicle sales were up 1.3% at just more than 1 million units. Earlier in the year, sales rose double digits as buyers rushed out to buy EVs before subsidies ended.