Auto Sales Slowing Down in China
    2012-05-24 09:07:20     CRIENGLISH.com         Web Editor: Mao

Nowadays, fewer people are buying cars in China. The overall sales volume dropped by 1.3 percent in the first quarter of this year compared to the same period last year, a decrease for the first time in recent years. Does this mean that China has hit an industry plateau, or is this just temporary?

Let's find out more with our reporter Liu Min.

A 1.3 percent drop in auto sales in China may not be particularly alarming data, but compared with the 30 percent growth in 2009 and 2010, back when China had one of the most promising auto industries, it seems a bit gloomy.

More than three fifths of the current listed auto company market reports from the first quarter of this year have shown a rapid plummet in sales. For example, the ambitious BYD reported a 90 percent drop in net profits, and China's largest automaker First Automobile Works, or FAW, saw a 103 percent decrease in the same category.

Sales manager Xi Chunhong from a Beijing-based dealership says she's witnessed the sharp decrease in the current market.

"Back in the 2009 and 2010, we could sell as many as 220 to 230 per month, so the high sales volume brought us higher income every month. Those were good times. But now we are experiencing a sluggish period. 60 to 80 is the average sales volume every month during the first three months."

Not only are the mainstream auto models facing slow development, but new energy cars are also taking a hit. According to statistics released by the China Auto Industry Association, the production and sale of new energy cars only takes up 0.2 percent of the entire industry in the first quarter of this year.
 
Back in June 2010, China started to boost sales of new energy cars by providing subsidies. The trailblazing program took place in several cities such as Shanghai, Changchun, Shenzhen, Hangzhou and Hefei. Shenzhen Pengcheng Taxi Company is the first cab company in China using electric cars as taxis. Currently, the BYD E6 models are priced at 300 thousand yuan each. Even with a huge amount of subsidies, the price of the model is still as much as 180 thousand yuan. Driver Luo Baodong says he highly doubts if such models will be able to compete.

"The price of the car is three times the non-electric ones, so the insurance expense is also very high, nine to ten thousand yuan per year. Plus, it is very inconvenient to recharge in the city since we only have one gas station to provide such a service. I doubt the car will be an easy sale for the average urbanite."

Also, the surging cost of owning a car has also curbed the sales. The crowded roads, higher parking fees and climbing fuel prices have given motorists a heavier burden. A driver surnamed Zhao from Tianjin says she's changed her mind about getting a new car.

"My monthly expenses on car maintenance are more than 150 yuan. The parking expenses used to be only two yuan per hour, but now it has increased to eight yuan at least. Many of my friends who drive much better cars also feel the pressure of these expenses and some are now taking the subway to work everyday. But even if you don't drive your car, you are still spending money on insurance and parking fees."

But automakers are still optimistic about the future. They predict that the next big boom will happen in middle and smaller cities, those with 500 thousand to two million people, and they will switch their strategy to focusing on developing cities rather than affluent areas.

For CRI, I'm Liu Min.

Share

                  


CRIENGLISH.com claims the copyright of all material and information produced originally by our staff. All rights reserved. Reproduction of text for non-commercial purposes only is permitted provided that both the source and author are acknowledged and a notifying email is sent to us.

CRIENGLISH.com holds neither liability nor responsibility for materials attributed to any other source. Such information is provided as reportage and dissemination of information but does not necessarily reflect the opinion of or endorsement by CRI.


 
Hourly News more

The Beijing Hour more
The Beijing Hour updated 20:00 2013/12/02
Micro-blog: weibo.com/beijinghour

Highlights more

People In The Know more
2014-01-20 20 Years of NAFTA and the Future of Free Trade
Twenty years on, how should we look back on NAFTA and its achievements?
2013-12-26 Big Data and Cloud Computing (2)
What role can big data play in the world of finance, and the regulation of that role?

Talk to CRI

• China
China News
Chinese Press
Diplomatic
Society
Gallery
• World
Asia-Pacific
Europe
Americas
Middle East
Africa
• Video
Traveller
Culture Heritage
Beyond Stardom
Dynamic China

Life 360
Panoramic Sports
• Radio
Highlights
Livecast
Ways to Listen
• Business
Audio
Markets
Editor's Choice
Biz Photo
Special Coverage
• Travel
Destinations
Editor's Pick
What's in
On the Road
• Showbiz
Chinese Films
Music & Stage
Art & Literature
Video
Photo Gallery
Special Coverage
• Language Learning
Ask Pingping and Jules
Chinese Studio
Elementary Chinese
Pop Charts
English News
English Snippets