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Car makers in China are bracing for zero to tepid growth in sales this year, after a tough 2018 when the world’s top auto market probably contracted for the first time in two decades, as slowing economic growth drags on demand.
Companies from homegrown Geely to Britain’s biggest automaker Jaguar Land Rover have in recent days flagged caution about China sales in 2019, hit also by Beijing’s trade war with the United States.
“We should notice the big uncertainties among macro economy and trade tensions, which hit the auto market in China last year and may happen again this year,” Yale Zhang, head of consultancy AutoForesight, told Reuters news agency.
China’s top auto industry association expects the country to sell 28 million vehicles in 2019, steady versus 2018, while other government and industry bodies see a 0-2 per cent growth.
China’s Association of Automobile Manufacturers is expected to announce later on Monday that China’s car market contracted in 2018, the first time since 1990.
Automobile sales in China fell about 14 per cent in November from a year ago, steepest in nearly seven years and the fifth straight decline in monthly numbers.
The data adds to worries for investors, already spooked by signs of a broader drop in demand from the world’s No.2 economy, especially after Apple issued a rare revenue warning citing weak iPhone sales in the country.
Analysts are, however, counting on measures promised by China to buoy spending for some relief.