Amid a tariff battle with Washington, SUV demand has dropped drastically. China’s auto sales have also went down by 5.3 per cent in July. The fall adds to signs of a worsening global economic state. According to the China Association of Automobile Manufacturers, the biggest auto market bought 1.6 million SUVs, minivans and sedans. Total sales fell by 4 percent to about 1.9 million. This statistic includes trucks and buses. Speculations about a lagging economy may have played a crucial role in the fall. This is after China tightened restrictions on lending to try and manage the swelling debt.
Gasoline-electric hybrids, however, rose by 47.7 percent to 84,000. This increase was boosted by government support. The rise, however, only accounted for 5 percent of the total sales. The industry’s highest earner, SUVs, shrank by 8.4 percent to 633,000. Sedan sales fell by 1.2 percent to 815,000. Ford Motor Co., together with its joint Chinese ventures, sold 77,506 vehicles in China alone. This represented a rise of 9 percent from a year back. The rise contributes to the industry’s growth by 6.7 percent in the world’s largest auto market for the same month. In the previous months of June and July, the company had a 17 percent and 25 percent rise respectively. Later this year, Ford plans on launching the premium Lincoln brand in China. Eight Lincoln retail outlets are to be opened in seven cities in China in October. Ford has been in partnership with Motors Corp Ltd and Chongqing Changan Automobile Co Ltd with whom they make popular vehicles like the Ford Kuga, Ford EcoSport and SUV models.
According to Ford, China auto sales will shoot up by 9 per cent in August despite the trade wars between the US and China. According to NIO capital, the electric car revolution start-ups in China will fall to only 1 percent since the industry requires significant investments in technology. According to Ian Zhu, the managing partner at the venture capital fund, the company has become very cautious on purchasing EV start-ups. He adds that the firm is looking to raise $1.5 billion for an offshore fund. This will also favor investment in joint ventures between traditional car makers and auto start-ups since. These two entities bring together innovation and real manufacturing capabilities.
Despite the drop in auto sales, China has successfully enticed investors to put in billions of dollars into production and start-ups. The trade war might, however, create hurdles for auto manufacturers and push the industry towards autonomous vehicles.