Car sales fell for the fifth consecutive month in November as cutbacks of state subsidies and weaker consumer sentiment continue to drag on the world’s largest auto market, the Financial Times reports.
Sales declined by around 14% last month compared with a year earlier, according to the China Association of Automobile Manufacturers, the largest drop since 2012.
“Since June, every month was worse in the total market, and this continues in November,” said the CEO of Volkswagen, the largest foreign auto brand in China. VW, despite being one of the few companies set for a sales increase this year, forecast China’s total passenger car market to contract by 4-5% on an annual basis.
This would be the first year in which the Chinese car market has shrunk in almost three decades. Analysts say sales have been dented by the halting of government tax rebates that provided a windfall in 2016-17, as well as a gloomier macroeconomic outlook.
“With the housing market being almost entirely frozen, liquidity becomes a big issue for many Chinese people. There’s a growing tendency to put consumption on hold due to uncertainty about the future,” Thomas Fang, partner at Roland Berger, told the FT.