China’s automotive industry is shifting from superfast expansion to slow growth, after the country’s car market already reached an immense scale in production and sales volume, the nation’s top industry regulator said on October 23.
Xin Guobin, vice-minister of industry and information technology, said car sales account for the lion’s share of China’s overall retail market and play a major part in the industrial economy.
“The recent slow expansion in car sales was chiefly because more than 29.4 million automobiles were sold in China in 2017. It would be very difficult to continue robust momentum on the basis of such a big number,” Xin said at a news conference in Beijing.
He made the comments after the growth rate of China’s auto sales stood at 1.5 percent year-on-year in the first three quarters of 2018. The weak rate triggers questions about whether China’s automotive industry is entering a cold winter, despite the fact that more than 20 million cars were sold in the nation over that period.
“Though the growth rate, as a whole, will slow down, many bright spots are promising positive development,” Xin added.
According to him, the revenue growth of the auto sector outpaces that of its sales and production volumes, highlighting that the industry is in good health. Official data shows that from January to August, automobile companies in China have seen their revenue grow by 8.8 percent year-on-year.
The industry is also increasingly concentrated in the hands of top players, which will give full play to the scale effect. Currently, the 10 largest automakers in China account for about 90 percent of the whole market.
John Zeng, managing director of LMC Automotive Shanghai, said the country’s new energy vehicles sector will also maintain strong momentum thanks to both favorable government policies and consumers’ growing desire to embrace eco-friendly cars.
In the first three quarters of this year, the production and sales volume of new energy vehicles reached 735,000 and 721,000 in China, marking year-on-year increase of 73 percent and 81 percent, respectively
“The big potential will encourage both foreign and domestic carmakers to step up their input in electric cars, to offset the slowing expansion of fuel-powered automobiles,” Zeng said.
General Motors Co announced a plan earlier this year to deliver 10 new energy vehicle models by 2020 in China. By the end of August, its new energy vehicles in China had logged more than 100 million kilometers. Three months earlier, the figure was 75 million km.