China’s automobile market is stepping into an ever pessimistic situation this year. Statistics data from China Association of Automobile Manufacturers show that China automobile market produces and sells 17.09 and 17.06 billion vehicles in the previous three quarters, with a decrease of 0.8% in producing and an increase of 0.3% in sales. September alone has a decrease of 5.6% in producing.

In the past decade, automobile industry was developing faster than equipment manufacturing industry, the secondary industry and GDP. From China’s joint into WTO, China’s automobile industry had embraced a two-digit-growth period, with average products and sales increasing speed of 24% from 2000 to 2010. However, the situation changed in 2010, and growth decreased to 7%, which became worst in May this year when negative growth appeared for the first time.

For the factor, professionals said that apart from the slow-down of macro-economic growth, limited purchase and license policy in first-tier cities, the difficult recovery of demographic dividends in short terms, reduced purchasing desire influenced by sharing transportation models such as Didi and Shenzhou, along with the short-term factor that potential buyers’ capital reduced by sluggish stock market, all contribute to the pessimistic situation.

Research institutions have lowered expectation on total production volume this year three times, from 25 million at the beginning of year, 24 million at the mid of year to 23 million at Q3. And expert predicts that possibility of exceeding 24 million this year is small, and China automobile production and sales may maintain a 5% growth in the future 10 years. One key reason for this phenomenon is that China’s automobile industry is under adjustment from size to quality, with production volume increasing from 2.07 million in 2000 to 23.72 million in 2014, occupying 3.54% and 26.44% respectively in the global volume. Under this background, structural excess is the fundamental problem faced by automobile companies. On the other hand, consumer demand decrease influenced by slowing economic growth also serves as a short-term factor.

Source:Gasgoo