Chinese vehicle sales declined last year for the first time since 1990. This slip ended almost thirty years of growth that global automakers projected would continue. Until now, automakers have consistently been able to count on China, the world’s largest car market.
China faced six straight months of declines in car sales in 2018, ending the year with a 13% fall in December. Auto sales last year reached 28.1 million, a 2.8% decrease from 2017 said China’s Association of Automobile Manufacturers (CAAM). Passenger-car sales fell to 23.71 million, a 4.1% decline, while commercial-vehicle sales rose to 4.37 million, a 5.1% increase. CAAM expects flat passenger-car sales for 2019.
Senior CAAM official Shi Jianhua attributed weak 2018 car sales to the phasing out of tax cuts on smaller vehicles and the United States’ trade war with China.
Ford (NYSE: F) performed worst among global car manufacturers in China. Sales declined 37% for the Company last year. Geely Auto, based in Hangzhou, China, sold 20% more cars in 2018. The Company, however, could not compete with the 67% growth it saw in 2017.
Toyota (NYSE: TM) excelled in China last year. Through improved marketing, the Company saw a 14.3% rise in sales, versus just 6% growth in 2017. Luxury brands Cadillac and Mercedes-Benz were also resistant to the industry-wide fall in sales.
Electric-car sales surged in China this past year, increasing 62% to 1.26 million. Electric vehicles currently account for 4% of total car sales. The Chinese government has set a goal in place to hit 20% by 2025.