In 2018, the Chinese market (PC + LCV) suffered its first decline in 30 years
- The Chinese car market has suffered its first decline in 30 years, since in 2018 it fell by 2.8% for all vehicles (PC + LCV), and even 4.1% for PC (which include SUVs and MPVs). The volume of registrations dropped to 28.08 million PC and LCV (including 23.7 million PC), but despite this underperformance, the Chinese car market remains by far the world's largest market ahead of the United States and Europe. The decline in the Chinese market materialized from the second half of 2018, when the fall in sales exceeded 10% for several months. Slowing global economic growth and trade tensions with the US are the main reasons.
- The Chinese government did not want to intervene to revive the market by lowering taxes, and it even recently indicated that it would not intervene in the future to revive the market by lowering taxes, these being definitively set at 10%. The Chinese government wants to let the market regulate naturally in order to become more robust. Under these conditions, we expect a stagnation of the Chinese market in the short term, without excluding the possibility that it could return to growth in future.
- The Chinese government has also passed a law banning the construction of new factories in areas already home to underutilized facilities. Today, China has a production capacity of 43 million vehicles a year, 15 million more than local sales. The Chinese government also wants to consolidate the Chinese auto industry by bringing together several local manufacturers who will be able to compete with the largest international groups.
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