Consumer confidence has taken a hit, with the index produced by the Capital University of Finance and Economics standing at 99.4 in the fourth quarter of 2018, compared to 105.1 in the same period of 2017.
The escalating trade war engineered by the US president is one reason for this decline, and it is also a factor in the disappointing year the auto sector has experienced, as sales dipped in the fourth quarter.
The China Passenger Vehicle Association reported sales of new passenger vehicles down 5.8% in 2018, the first decline in 26 years; earlier this week Geely reported that December sales alone were down 44% year on year.
But consumer confidence and trade wars are only part of the automotive market’s decline – improved public transport and the popularity of ride-hailing apps are also factors while the second-hand market grew almost 13% in the first 11 months of 2018, CGTN reported.
Whatever the reasons, the vice-chairman of the National Development and Reform Commission, Ning Jizhe, took to China Central Television, the state-owned broadcaster, to signal that some assistance was on the way, indicating that a package of measures to boost domestic demand would include the automotive and appliance sectors, although the specifics were unforthcoming.
Nevertheless, that was enough to reverse a slump in automakers’ shares; the impact on sales remains to be seen.
“The rally in auto stocks today [Wednesday] showed that government support could be of help to Chinese carmakers,” said Zhou Ling, a fund manager with Shanghai Shiva Investment. “But even with the enforcement of incentives, the auto market is unlikely to see a growth this year,” he told the South China Morning Post.
“Most of the car companies will be targeting flat sales,” he predicted.
Meanwhile, Ning indicated that new energy vehicles (NEV) and rural auto consumers would be a focus of incentives to encourage purchase.
Sourced from South China Morning Post, CGTN; additional content by WARC staff