According to data from the China Association of Automobile Manufacturers (CAAM), 1.74 million passenger cars were sold domestically in 2018, a 9.4% decline. Nikkei Asia highlighted how the decline in consumer confidence is a major contributing factor to the downturn, citing the CAAM statistics.
China Auto Market Faces Triple Whammy as Sales
Similar to the property market, China’s car industry is seeing a sharp drop in revenue. August saw a decline in car sales for the third straight month, which was indicative of lingering economic difficulties. According to data released on Tuesday, low consumer spending has reduced domestic demand for passenger and family cars. According to Nikkei Asia, total car sales, including exports, fell 5% year over year to 2.45 million units.
According to data from the China Association of Automobile Manufacturers (CAAM), 1.74 million passenger cars were sold domestically in 2018, a 9.4% decline. Nikkei Asia highlighted how the decline in consumer confidence is a major contributing factor to the downturn, citing the CAAM statistics and China Auto Market Faces Triple Whammy as Sales.
The Chinese government is providing subsidies to promote the purchase of new cars and the replacement of outdated models in an effort to buck these trends. These incentives, nevertheless, haven’t been sufficient to stop the decline in sales.
Sales of gasoline-powered vehicles plummeted, down 34.1% to a meagre 795,000 units.
This decrease is a sign of a broader market trend where hybrid and electric cars are gradually gaining popularity. Moreover, sales of commercial vehicles decreased by 20.9% throughout this period resulting in 198,000 units overall.
Real estate market; China Auto Market Faces Triple Whammy as Sales
The declining real estate market, which has become a significant drag on the economy as a whole, and inadequate investment in infrastructure development are directly linked to the decline in sales of commercial vehicles. According to Nikkei Asia, the decline in construction activity has a direct effect on the need for commercial transportation, which lowers sales.
In addition, there are significant financial issues affecting the China Evergrande New Energy car Group (CENEVG), an electric car division of the broader Evergrande Group. In addition to going through bankruptcy procedures, the company has started speaking with possible buyers. The fact that creditors are now pursuing repayment of enormous debts has only made matters worse.
Evergrande’s financial situation is becoming more complicated as a Chinese court recently heard an application from creditors claiming significant financial damages stance. Hui Ka-Yan, the founder of Evergrande, and other important executives are being chased by liquidators for billions of dollars. The financial difficulties faced by Evergrande’s electric vehicle division underscore the wider uncertainty in the property development industry in China, exacerbating the nation’s economic prospects. (China Auto Market Faces Triple Whammy as Sales_)
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