Economic Slump
Due to the economic slowdown and poor domestic consumption, both vehicle productions and sales simultaneously decreased for the first time in seven years in China, the world’s largest auto market. While Chinese domestic auto brands held a 41.5 percent market share in the first half of this year, brands from Germany, the U.S., and South Korea saw their market shares fall.
According to statistics from the China Association of Automobile Manufacturers on July 20, vehicles produced and sold in June fell to 1.85 million and 1.8 million units compared to May, or 5.8 percent and 5.3 percent, respectively. The figures were also a 0.2 percent and a 2.3 percent dip from the same period in 2014. Accordingly, vehicles produced and sold in the first half of the year totaled 12.1 million and 11.85 million units, showing a decrease of 2.6 percent and 1.4 percent, respectively, from the same period a year earlier.
In particular, the production and sales of sedans in June stood at 1.59 million and 1.51 million units, a fall of 0.7 percent and 3.4 percent, respectively, from the same period a year ago. The figures dropped for the first time since Dec. 2008.
Due to the economic slowdown and poor domestic consumption in China, the sales growth of sedans has virtually ended. While the sales of crossover utility vehicles (CUVs) dropped further, the sales of sports utility vehicles (SUVs) and multi-purpose vehicles (MPVs) dropped slightly.
By the end of June, China’s domestic brands held a 41.5 percent market share, up 3.6 percentage points from 37.9 percent in the same period a year earlier. This is mainly because of the popularity of their SUVs. In the same period, however, German brands showed the highest drop in market share, from 21.4 percent to 19.7 percent. Also, the market share of U.S. brands fell from 12.7 percent to 12.1 percent, while the figure of Korean brands decreased from 9 percent to 8.1 percent. In particular, the sales of Beijing Hyundai and Dongfeng Yueda Kia dropped to 60,145 and 37,505 units last month, showing a rapid fall of 30.6 percent and 26.5 percent, respectively, from the same month a year ago.
As U.S. automakers are also struggling in the Chinese market, stock prices have slumped. CNBC reported that the stock prices of General Motors and Ford dropped by 12 percent and 5 percent, respectively, this year. It also said that sluggish sales in China are one of the main reasons for the drop in stock prices.
Meanwhile, the point is made that foreign automakers should also scramble to change their strategic car models, as the production and sales of new renewable energy vehicles in China in the first half of this year have increased as much as 2.5 times and 2.4 times, respectively, from the same period a year earlier.