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Permanently Slower Growth Ahead for China’s Car Market?
The heady days of China’s double-digit growth in annual car sales may be over forever, Bloomberg News says.
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The heady days of China’s double-digit growth in annual car sales may be over forever, Bloomberg News says.
Last year, demand for passenger vehicles in China fell 4%, the first decline in 25 years. Several analysts promptly proclaimed the Chinese market “mature,” with slower and more cyclical growth ahead.
China’s car market is being affected by the one trend that has blunted sales in other major market: the surge in ride-hailing alternatives to personal ownership, Bloomberg says. It notes that China’s largest such service, DiDi Chuxing, claims to serve 30 million active users per day, most of them in its home market.
Bloomberg statistics indicate about 1 billion people per day use a ride-hailing or sharing service worldwide daily. Volume has jumped by roughly 50% in 12 months.
The news service adds that China has developed a booming used-car market that is siphoning off new-car sales. The average age of a car on the road in China is a mere 4.8 years compared with about 12 years in the U.S.
But used-car sales in the country rose 12% to a record 13.8 million last year, according to the China Automobile Dealers Assn. The group tells Bloomberg the growth in a used-car population hurts sellers of mid-market new cars because consumer can buy a used BMW or Mercedes for about the price of a new Ford or Hyundai.
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