Tue, Dec 11, 2018 - 3:22 PM [BEIJING] Car sales in China plunged for a sixth consecutive month, intensifying pressure on global automakers that have staked their future growth on the world's largest auto market. Retail sales of sedans, multipurpose vehicles and sport utility vehicles plummeted 18 per cent to 2.05 million units in November, the China Passenger Car Association said on Monday. That brought the drop in the first 11 months of the year to 4.3 per cent, all but ensuring the market will have its first annual decline in at least two decades. With the trade war with the US showing no signs of abating and slumping stocks weighing on consumers' purchasing power, the market that global carmakers have relied on for growth since the 1990s now risks an extended decline. Demand is also sputtering in Europe and North America, leaving auto brands few places to go for growth. Automakers -- which poured in billions of dollars in the past 20 years to bulk up factories in China -- now need to view future expansion plans in a different light. The trade war with the US has already prompted luxury-car makers BMW AG and Daimler AG to warn about lower profits while Chinese consumers staying away from showrooms forced Jaguar Land Rover to shut a factory temporarily. Carmakers' hopes of a truce in the trade war were boosted last week as President Donald Trump's tweet claiming that China had agreed to "reduce and remove" tariffs on American-made vehicles. Still, China didn't confirm this and Trump's advisers were left scrambling on how to explain the tweet. Market Shift Beyond a slowing economy, the rising popularity of car-sharing and ride-hailing services is reducing the need for individuals to buy vehicles. Shared autos used by popular ride services such as Didi Chuxing will account for 30 per cent of China's passenger vehicles and majority of miles traveled by 2025, according to a forecast by Bill Russo, founder and CEO of Shanghai-based consultancy Automobility Ltd. They currently account for 13 per cent of passenger vehicles. The slowdown has pushed China's car inventory levels to a record high. An index tracking the volume of unsold cars reached its highest ever reading in November, based on data from the China Automobile Dealers Association. China is also escalating its crackdown on peer-to-peer lending, a move that could hardly have come at a worse time for carmakers and dealers. It dropped 20 per cent in the first half of this year and may shrink even further as policy makers push small- and medium-sized operators to close, according to data compiled by 01Caijing and AskCI Corp. Bigger Push The challenges are emerging just as global brands are making a bigger push into China, helped by the government opening up the economy. BMW in October revealed a US$4.1 billion deal to secure control of its Chinese joint venture, becoming the first automaker to take advantage of China's policy to let foreign companies own a majority holding of their local partnerships. Daimler is interested in making a similar move, people familiar with the matter said last week. Western brands are also boosting manufacturing capacity in China and expanding local production of models including electric cars. Tesla Inc. is pushing ahead with plans to set up production in Shanghai. Longer term, carmakers are betting that growth will return as China's middle class expands and new electric models will lure consumers back to showrooms. Volkswagen AG, the top foreign auto brand in China, expects the market to be unchanged next year before returning to growth in 2020, its China chief Jochem Heizmann said last month. BLOOMBERG
American car sales have fallen for the sixth month in a row , increasing pressure on global car manufacturers, which have relied on the market for November . November saw domestic sales of multipurpose vehicles, sports utility vehicles and sedans drop 18% to 2.05 million units, according to the China Passenger Car Association . The decline, alongside falling sales in North America and Europe , means car manufacturers have few places left to look for growth.