China’s auto sales fell 4 per cent in October from 2018 as demand for electric cars in the world’s biggest auto market slumped, reflecting the withdrawal of subsidies, cooling economic growth and a trade war with the United States.
Figures released by the China Association of Automobile Manufacturers showed that new energy vehicles, which include hybrid and electric cars, showed a contraction for the fourth consecutive month.
China has been a strong supporter of new energy vehicles ‒ such as plug-in hybrids, battery-only electric vehicles and those powered by hydrogen fuel cells ‒ and has introduced sales quota requirements for automakers.
The country aims to ban petrol and diesel vehicles by boosting ownership of less-polluting cars with the lure of subsidies for first-time buyers. But the end of these incentives in June has made the vehicles more expensive, dampening demand.
Total vehicle sales, including trucks and buses, in the country shrank 0.6 per cent to 2.3 million, CAAM said.
Sales of SUVs were down 8.3 per cent in the first 10 months of the year, while vehicle sales by Chinese brands were down 9.6 per cent from a year earlier at 770,000 in October.
China reported a decline in annual new auto sales last year for the first time in 28 years.
Due to rising trade tensions between China and the United States, automakers have tried to avoid tariffs by switching sourcing to other countries such as Mexico or India, where US manufacturers have set up production plants and supply chain networks.