By Alfred Romann
China’s auto market offers a great case study for much of what is happening with China’s economy.
Like much of China’s broader economy, the market is slowing. Sales have been dropping steadily for the last few months. In fact, total vehicle sales fell 10.1 percent year-on-year in October and 0.9 percent month-on-month. Trade tensions and consumer concerns both play a role in the slowdown. A completely predictable and totally natural slowdown after years of ridiculous growth also play into it.
Still, China is now the largest auto market in the world and the great hope for automakers around the world – the Germans, Americans, Japanese and Korean automakers are all looking to China for future growth.
As with much of China’s economy, however, the great big exception to the slowdown can be seen in innovative technologies. Even as sales of traditions (meaning petrol-powered) cars, trucks and buses slow down, sales of electric and hybrid vehicles are surging.
In fact, sales of electric vehicles jumped 44.7 percent year-on-year in October. Sales of hybrids powered up by 104 percent.
True, both are coming from a very low base. Total sales of electrics and hybrids added up to 138,000 units in October, compared to total sales of 2.334 million for all vehicle.
Still, Chinese automakers are rapidly improving their offerings in this area. Chinese cars are getting better and sales continue to rise. The emergence of a true Chinese auto exporter with global scope is all but inevitable… although it may take a few years still.
The slowdown in sales is certain to continue but just as certain is the fact that China’s auto market will continue to be one of the linchpins of growth for all automakers.