It wasn’t too long ago that the meteoric rise of the Chinese car market made it the darling of the automotive industry, but a perfect storm of unfavourable market conditions has left local carmakers punch drunk. According to Automotive News Europe, China’s economic growth slowed to 6.2% in the second quarter of this year – down from 6.8% in 2018 – and this has had a dramatic effect on the domestic market share.
With total light vehicle sales of Chinese brands in the first half falling 22% to under four million units, their market share has also dropped by 3.9%, dipping under the 40% mark. The economic downturn has hit low-income buyers the hardest – precisely the target market of domestic brands, which offer affordable vehicles costing between 50,000 and 100,000 yuan (RM30,000 to RM60,000).
In tough times, these buyers are more likely than affluent households to cut discretionary spending on big-ticket items such as cars, and the brands are feeling the pinch. Not the least of which is China’s biggest carmaker Geely, despite the fact that the company has expanded its product lineup in recent months.
Over the past year alone, the company introduced the Binrui sedan and Binyue SUV on the B-segment Modular Architecture (BMA); its first MPV, the Jiaji; and the Xingyue SUV built on the C-segment Modular Architecture (CMA) that is shared with the Volvo XC40. It also launched its Geometry new energy vehicle brand in April, together with its first product, the Geometry A electric sedan.
But none of these models have generated any meaningful volume, and the company’s sales fell by more than 20% for the fourth straight month in July, with the most recent figure of 91,375 units being 24% down. Domestic brands are also reeling from their investments in new energy vehicles, which they made to take advantage of incentives that the federal government has since scaled back.
Subsidies on electric and plug-in hybrid vehicles were slashed by more than 50% on June 25, instantly cutting demand for these vehicles. Sales of BYD’s EVs and PHEVs shrunk for the first time in July, by 12% compared to last year, while Jianghuai saw its EV sales plunge some 66% last month. The fact is, says the report, consumers have little interest in electrified vehicles once subsidies are taken away.
It’s not going to get any easier for Chinese brands, with economic growth expected to continue stagnating as long as the country’s trade war with United States continues to escalate, and the remaining subsidies for new energy vehicles set to be phased out by the end of the year.
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Proton volume not yet included in geely total sales. Else will show big increase instead, becuz Proton ady selling to Brunei, Indo, Singapore and Thai
Don’t know already larr Proton’s fate. If Geely sales continues to drop, Proton will be in a Game Over danger.
Proton is game over if not for Geely. Can’t depend on local CEO.
Malaysia is Geely’s Dumping playground for EOL models like the Boyue
Pity those buyers of fake Protons … less than 12 months comes the new Boyue
Whether EOL or not its still hugely better than game over Toyota & Perodua outdated junks. Only we China entry can we see how much these Japanese are ripping us off for so long time.
Could it be that ahbeng and ahlian didnt but china made cars because they prefer european cars…thats why sales dropped…more prestige maaa driving alfa romeo in sri kembangan new village…ahbeng can look like romeo some more…ahlian for sure look like juliet…and together they look like a perfect couple made in heaven…
Abang abang motor all desire to own honda ketam turbo
It’s like saying Abang2 drives Proton becoz they look cooler with modified local cars.
In SG got no more Proton already lah.. they left in 2018. Our COE prices killed Proton
P1 no more in Sg? OMG!
“Geely, formally known as Zhejiang Geely Holding Group, is the parent company of Sweden-based Volvo Cars and also holds stakes in Germany’s Daimler as well as Proton in Malaysia. Though Geely is the third-largest automaker in China, the company does not rely on joint ventures with foreign car manufacturers, unlike domestic peers.”
I don’t see why the writer has to say this geely is no.1 in china; the excerpt above in from Nikkei Asian Review published on 14/08/19 and they say they are just third largest. My BS radar went off when I read the inacuracy in this article and I hope the writer fixes his mistake.
Habislah Proton!
Sorry to disappoint you but Proton is improving every day. Slowing sales in China means Geely will focus on other markets such as SEA, which mean more products are going to be introduced here. Indeed, it’s habislah Perodua!
The problem is….china cars too many problem thats y sales all down and demand shrink. Habislah proton. In 3-5 yrs x70 become junk.
That is why many people prefer the game changing Aruz even though X70 have better value for money. The only reason why X70 cannot sell is because of it’s game over quality and RV
What problem? They still sell 91k per month.
Like the japanese in europe? After 3-5yrs. japanese cars in europe are junk.
And europe cars are junk in japan, even in mesia.
Junk in Japan? You mean this?
https://paultan.org/2018/12/12/volvo-xc40-named-the-2018-japan-car-of-the-year/
European cars are designed to drive while japanese cars are designed to stand in traffic jam
Meanwhile best selling SUV in Europe is Nissan Qashqai.
Just bring all car to Malaysia. We will buy its.
Geely is a good car. BUT because of politics, the entire SEA will not buy anything from China as a protest
The fad has ended. The middle kingdom thinks the heaven will back them against western powers. Their 5000 years of inflated ego will fool them once again just in the old days. But this time there are no tea and opium.
considering china has a 20 million car market, Proton sales increase does not even matter, however now that Geely is suffering from a downturn expect Proton will stay as a rebadging exercise..localizing the x70 with such small volume my not be viable and would probably raise the prices.
“The fact is, says the report, consumers have little interest in electrified vehicles once subsidies are taken away.”
Actually the most interesting part of the report. EVs are still unusable for most consumers: Too expensive, takes too much time to charge, too difficult to find a fast-charger and once the battery is rosak, the car is a complete loss.
Yet we still have some people here hankering for cheap local EV made cars. And he expects the batteries to be easily and cheaply replaced like AA batteries.
You need to add “compared to petrol cars”. If demand is as high as normal car, volume will push down the prices, just as historical battery prices. From 16,000 USD / kw, to 150 USD /kw in less then 10 years. The future is EV whether we like it or not. Current purchase + ownership prices actually equavelet with petrol cars. But we (Malaysian) used our atok’s car like new car, even 1990s Iswara & Kancil is still around, driving like drunken snail OTR. Why maintain 9 years loan + depreciation? Better maintain 3 years loan & renew every 3 years. More economically justified, n new car every 3 years.
“Why maintain 9 years loan + depreciation? Better maintain 3 years loan & renew every 3 years.”
Most people would love to renew every 6 months. But they lack the money, therefore 9 years loan…
BTW: A battery replacement for a Tesla Model S is $45.000. Not RM, US$..
EV is the future. But the battery type of EV. It should be hydrogen fuel cell.