Chinese wholesale vehicle sales plunged in September, according to newly released data from the China Association of Automobile Manufacturers.
Passenger vehicle wholesales were down 16.5% YOY to 1.75 million units, Bloomberg noted Tuesday morning.
The China Association of Automobile Manufacturers predicts for a weaker full year auto market due to chip and power shortages, it said. It expects the chip shortage to ease up in Q4 of this year, marking yet another prediction amongst a sea of confusion between manufacturers and analysts as to when the global shortage will end. Other analysts and several automakers have commented that the chip shortage could continue into 2022.
Despite the dip, there were a couple silver linings. The CAAM has been forecasting pickup truck sales to rise by more than 1 million units by 2030, from 414,000 in 2020.
New energy vehicle wholesales also continued to be robust, up 148.4% to 357,000 units.
Recall, in August, total automobile sales (including to companies) plunged about 22%, the biggest decline since last March when the nation was still in lockdown to control initial Covid cases.
While China’s economic growth was already slowing in July, with private consumption weakening faster than industrial and export sectors, Bloomberg noted that that was made worse by the Covid outbreak in August as cities nationwide reintroduced lockdowns during the summer holidays, a time when consumers usually travel and spending on cars traditionally starts to pick up.
Economic activities slowed further in August on a year-on-year basis, especially consumption and service activities, partly due to the flood shocks and Covid restrictions, UBS AG economists wrote in a note last week. “We see property activities weakening further in the second half on continued hawkish property policies,” they said.
The continued shortage of computer chips and weakening demand has hit vehicle output and sales this year.
European auto names like BMW and Volkswagen will likely be on watch after China's disappointing number. Bloomberg notes that reaction may even spill over into OEMs like Valeo and Faurecia.