The China Association of Automobile Manufacturers (CAAM) has reported data for August, and the world’s largest vehicle market was down for a third consecutive month, shrinking by 3.4% year-on-year to 1.4 million units.
The mixed bag of sales results for the foreign OEMs in China in August further underlines the uncertainty in the country’s new vehicle market in the wake of stock market turmoil and the recent currency devaluation.
CAAM has reported data for August, and the world’s largest vehicle market was down for a third consecutive month, shrinking by 3.4% year-on-year
Ford reported its best US August sales for nine years, but in China the OEM experienced a 3% decline, and reports indicate that the OEM’s year-to-date sales in China are down by 1%. GM, which enjoyed record year-to-date retail sales in the first eight months of the year, up 2.3% to 2.2 million units, also reported an August sales decline in China, of 4.8%, “owing to softness in the overall vehicle market”. Skoda’s August sales slid by 11.4%, and Nissan reported a 5.5% decline in August to add to the 13.9% fall it experienced in July. Audi and BMW both reported their best August sales ever globally, apart from in China. Audi was down 4.1% y-o-y in China in August, and BMW reported a lesser decline of 1.4%, although that came in the wake of a 7.4% drop in July.
Honda and Toyota, however, both increased sales and market share in China in August, and Porsche – whose August sales in China were up by 17.2% y-o-y, and 37.5% in the year-to-date – and Mercedes-Benz appear unaffected. “It’s not a financial crisis,” Daimler Chief Executive Dieter Zetsche was recently reported as saying, adding that he believes “gloomy forecasts are overdone”. Mercedes-Benz saw its sales in China grow, and the brand increased its market share – a great place for the company to be considering where its own internal China crisis was taking it just a couple of years ago.
The warning signs have been developing across the year. In April, at the 2015 Auto Shanghai, VDA President Matthias Wissmann spoke of growth in China’s automotive market in 2015 of 6%; by July, CAAM had cut its 2015 growth forecast from 7% to just 3% – and that was before the feared stock market crisis and surprise currency devaluation.
China’s car market faces a “new normal” of single digit growth, says AlixPartners. The 2015 China Automotive Outlook, published on 9 August by the global business advisory firm, warns that China could even suffer a possible market contraction in 2015, the first since the 2008 global recession.
“It’s not a financial crisis,” Daimler Chief Executive Dieter Zetsche was recently reported as saying, adding that he believes “gloomy forecasts are overdone”
As well as the sales decline in China, the automotive industry – amongst other sectors – is struggling against weak performance in a number of key global markets. Russia will take years to recover from the market collapse brought on by sanctions and the oil price crash; widespread industrial action has added to the challenges that India faces as it emerges more slowly than expected from its own cyclical crisis; Brazil’s economy continues to slide towards recession, with few options for companies operating locally to turn to neighbouring countries given the poor market performance across much of South America. Weakness in many key Asian markets completes a gloomy picture.
Thanks goodness, then, for Western Europe, where the car market was up by around 10% in August. This, at least, should give automotive industry executives something positive to riff on at next week’s IAA in Frankfurt.
Martin Kahl is Editor, Automotive World
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