Published: Wed, January 15, 2020
Markets | By Otis Pena

China auto sales fall again in 2019 amid trade war

China auto sales fall again in 2019 amid trade war

Ford Motor Co.'s China sales fell for the third year in a row in 2019, dropping to less than half of what it sold at its zenith in 2016, and the company said the situation for the broader market is likely to get worse in 2020.

The China Association of Automobile Manufacturers (CAAM) expects a 2% fall in vehicle sales.

After a three-month transition period that ended on June 25 a year ago, local governments stopped subsidizing purchases of NEVs other than new energy buses and fuel cell vehicles, resulting in sharper declines of NEVs sales in the latter half of 2019.

"We have moved away from the high-speed development stage".

The automaker plans to launch more than 30 new models in China over the next three years, of which over a third will be electric vehicles. More than half of that total was accounted for by sales of lower-cost Chinese SUVs, which sank 4.2% to 4.9 million.

The country's vehicle output stood at 25.72 million units last year, down 7.5 percent year on year. The drop in auto sales is expected to be milder than previous year, when sales were pressured due to new emission standards in a broader economy that was both shrinking and under attack amid a trade war with the United States.

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"The easing of trade tensions between China and the United States has also helped restore consumer confidence", said Kang, who expects vehicle sales in China to grow 0.05% this year.

In China, Ford makes cars through a joint venture with Chongqing Changan Automobile Co.

After two decades of explosive growth, China suffered its first annual decline in auto sales in 2018, because the turmoil with President Donald Trump and slowing economic growth led consumers to postpone major purchases. In total, it sold 567,854 vehicles over 2019. While industry experts ascribed the latest slump to tariffs brought by the China-U.S. trade war, the company said its sales crisis stemmed mainly from a lack of new products, Reuters reported earlier.

The bright spots have been Japan's Toyota Motor Corp and Honda Motor Co Ltd as well as USA electric vehicle maker Tesla Inc, which started delivering China-made Model 3 sedans from its $2 billion Shanghai plant this month.

Among models that were launched in the fourth quarter, the new Ford Escape performed better than any other model in terms of received orders, while the Lincoln Corsair is the first localized Lincoln auto in China.

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