Passenger car vehicle sales in China fell yet again in December, plunging 3.6% to 2.17 million units, according to the China Passenger Car Association.
This marks the 18th drop in the past 19 months for the country, which feels to be single-handedly spearheading a global recession in the industry. For the full year, sales in China declined 7.5%, marking the second straight annual decline.
Automakers continue to struggle with a slowing economy and tariff uncertainties, despite "Phase 1" of the U.S./China trade deal supposedly being finished (even though it still has not been signed), according to Bloomberg.
GM said on Tuesday that its sales were down 15% in China and said that pressure into 2020 would likely continue.
But, some analysts say there's reasons for optimism: namely, that the pace of declines has slowed for four months in a row as comps have become easier. This will only hold true heading into 2020, where 2019's comps will be much easier to catch than those of years prior, while the auto market was booming.
The China Association of Auto Manufacturers predicts that vehicle sales will drop 2% in 2020, marking a third straight annual decline. Sales fell 7.5% in 2019 and 6% in 2018.
Well, if that's what you want to call progress...
Cui Dongshu, the CPCA's secretary general told the South China Morning Post: “For 2020, the market is expected to get off to a slow start as the downward momentum continues. But sales will shoot up from the middle of 2020 amid the release of pent-up demand. After all, the number of licensed drivers is increasing and new drivers will eventually buy cars.”
Global automakers have invested billions in China over the last few decades, but are all now reconsidering expansion plans in the area. For instance, Peugeot maker PSA Group is selling its 50% stake in a JV it has to make cars in China.
Meanwhile, local Chinese manufacturers are also feeling pain. BYD Co. posted an 11% drop in 2019 sales and SAIC Motor reported a "similar decline".
To make matters worse, Beijing slashed subsidies on EVs and NEVs this year - as we noted in the beginning of December - causing a huge dent in sales of plug-in vehicles. NEV sales plunged 42% in November.
Yet some analysts insist that progress will be made in the new year.
"Environment-friendly cars would return to positive territory this year," analysts talking to the SCMP said.
As for us? We have been around "analysts" long enough to confidently say we'll believe it when we see it.