Despite endless government incentives and a false recovery, reality again seems to be plunging into China’s auto market.
Beijing announced today that 1.68 million units were sold in the country in JuneAccording to the China Passenger Car Association (CPCA). This means a decrease of 6.5% year on year, despite the May jump of the catwhere the numbers rose 1.9% over the previous year, mainly due to easy competition.
The association called evidence of “ongoing recovery” in the passenger car market, according to Reuters,
As in May, luxury car manufacturers outpaced the market, and NEV car sales reached 85,600 units. Tesla accounted for 23% of the clean battery sector per month and CPCA Secretary General Cui Dongshu said he expects electric car sales to surpass in the second half of 2020.
These numbers will not be too big a surprise for Zero Hedge readers. we marked days ago June sales data look like it’s going to be another month downturn for China. Just a few days ago, CPCA announced that car retail sales were down 37% year on year for the 4th week of June.
Average daily sales fell to 51,627 during June 22-27, which was marked by a consecutive fall of 6% compared with the same week in May, indicating a slight respite or improvement from the pressure of the coronavirus pandemic on the industry. The PCA blamed the “seasonal factors” for the fall, which is a fun way of saying “the Chinese-borne virus destroys the entire planet.”
We said a few days ago:
“It also paints an ugly picture for the number of new car sales in June, as we reported about 3 weeks ago that the first the week in June was also to a terrible start. In this article, we noted that car retail sales fell 10% year on year – but more importantly, 20% of the same period in May – in the first week of June. “
This news, despite better than expected results in May, Where sales showed 12% more than last year.
In accordance with Detroit BureauRetail sales of premium cars and luxury cars led to an increase in May, an increase of 28% last month compared to the same period last year. Luxury cars retained their strength in June.
The Chinese government continues to try to stimulate demand through new policies aimed at tempting buyers.
Feedback, we recently noted that car manufacturers in the US are also developing significant incentives to return buyers to car dealerships. Europe follows this example: Volkswagen is launching a commercial initiative to restore demand, including improving leasing and financing conditions.
The forecast for the year in China remains less optimistic. CAAM predicts sales will fall 15–25% per yeardepending on whether the country can further slow the spread of the virus.