Comments on Slowing Car Sales in China
Bikes ruled the streets of China's cities before the economy began to take off in the 1990's. I owned a bicycle when I lived in China. Now, even though sales may be slowing as noted in this article, cars rule city streets, and they rule them in a frenetic, traffic-congested way:
REPOSTED FROM INKSTONE:
Chinese are Buying Fewer and Fewer Cars
By: Sidney Leng
Auto sales in the world’s most populous country fell for 13 months since last July. They are expected to keep falling.
The slowing sales of vehicles in the world’s largest auto market is not just bad news for automakers worldwide. It is also a sign that the US-China trade war and a slowing economy are weighing on Chinese consumers.
“There are a series of reasons for stalled sales: tighter terms for vehicle financing, the increased popularity of ride-sharing and a heightened environmental sensibility,” said Carl Tannenbaum, chief economist from the financial services firm Northern Trust.
“But a more tenuous economic outlook is also at play. No matter the country, households don’t extend themselves when the future is uncertain.”
Car sales are a key component of overall Chinese consumption, accounting for roughly 10% of total retail sales.
The automotive sector’s output accounts for more than 10% of the country’s gross domestic product, which grew at its slowest pace on record in the second quarter this year.
A common gauge of the growth potential for China’s car market is ownership per thousand people, which rose to 170 last year.
China’s car ownership rate remains well below that of many developed countries such as the US, at 800, and Japan, at over 600.
But some have argued that China is reaching its ownership ceiling, with the country’s expanding public transport network and high urban density being contributing factors.
Last week, the central Chinese authorities asked local governments to loosen auto purchase limits meant to reduce air pollution and boost incentives for buying new-energy vehicles.