Chinese car sales continue downturn as demand shrinks; Geely sales drop 20% for 4th straight month

Chinese car sales continue downturn as demand shrinks; Geely sales drop 20% for 4th straight month

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.

Chinese car sales continue downturn as demand shrinks; Geely sales drop 20% for 4th straight month

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.

Chinese car sales continue downturn as demand shrinks; Geely sales drop 20% for 4th straight month

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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Jonathan Lee

After trying to pursue a career in product design, Jonathan Lee decided to make the sideways jump into the world of car journalism instead. He therefore appreciates the aesthetic appeal of a car, but for him, the driving experience is still second to none.

 

Comments

  • Leonardo on Aug 13, 2019 at 11:08 am

    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

    Like or Dislike: Thumb up 15 Thumb down 14
    • Tucson on Aug 13, 2019 at 11:34 am

      Don’t know already larr Proton’s fate. If Geely sales continues to drop, Proton will be in a Game Over danger.

      Like or Dislike: Thumb up 14 Thumb down 21
      • LOL Non Ori on Aug 13, 2019 at 12:57 pm

        Proton is game over if not for Geely. Can’t depend on local CEO.

        Like or Dislike: Thumb up 17 Thumb down 7
        • Fake Proton on Aug 13, 2019 at 1:27 pm

          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

          Like or Dislike: Thumb up 12 Thumb down 14
          • Celup King on Aug 13, 2019 at 3:07 pm

            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.

            Like or Dislike: Thumb up 17 Thumb down 19
    • AutoFrenz (the original) on Aug 13, 2019 at 11:46 am

      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…

      Like or Dislike: Thumb up 9 Thumb down 10
      • Abang abang motor all desire to own honda ketam turbo

        Like or Dislike: Thumb up 9 Thumb down 0
      • Bangla on Aug 13, 2019 at 1:05 pm

        It’s like saying Abang2 drives Proton becoz they look cooler with modified local cars.

        Like or Dislike: Thumb up 3 Thumb down 2
    • Singaporean Honda Ah Beng on Aug 13, 2019 at 12:14 pm

      In SG got no more Proton already lah.. they left in 2018. Our COE prices killed Proton

      Like or Dislike: Thumb up 1 Thumb down 3
    • “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.

      Like or Dislike: Thumb up 1 Thumb down 0
  • Habislah Proton!

    Like or Dislike: Thumb up 24 Thumb down 17
    • LOL Ori on Aug 13, 2019 at 11:31 am

      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!

      Like or Dislike: Thumb up 30 Thumb down 22
      • Lol lol lol on Aug 13, 2019 at 11:36 am

        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.

        Like or Dislike: Thumb up 10 Thumb down 22
        • 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

          Like or Dislike: Thumb up 3 Thumb down 21
        • What problem? They still sell 91k per month.

          Like or Dislike: Thumb up 11 Thumb down 15
        • Heng Lee on Aug 13, 2019 at 12:51 pm

          Like the japanese in europe? After 3-5yrs. japanese cars in europe are junk.

          Like or Dislike: Thumb up 10 Thumb down 1
          • Junkyard on Aug 13, 2019 at 5:18 pm

            And europe cars are junk in japan, even in mesia.

            Like or Dislike: Thumb up 4 Thumb down 2
          • Junk in Japan? You mean this?
            https://paultan.org/2018/12/12/volvo-xc40-named-the-2018-japan-car-of-the-year/

            Like or Dislike: Thumb up 7 Thumb down 0
          • Heng Lee on Aug 13, 2019 at 7:45 pm

            European cars are designed to drive while japanese cars are designed to stand in traffic jam

            Like or Dislike: Thumb up 2 Thumb down 3
          • Nissannn on Aug 13, 2019 at 10:05 pm

            Meanwhile best selling SUV in Europe is Nissan Qashqai.

            Like or Dislike: Thumb up 1 Thumb down 0
      • MyNewToy on Aug 13, 2019 at 12:07 pm

        Just bring all car to Malaysia. We will buy its.

        Like or Dislike: Thumb up 3 Thumb down 0
      • Geely is a good car. BUT because of politics, the entire SEA will not buy anything from China as a protest

        Like or Dislike: Thumb up 1 Thumb down 2
  • lilytan on Aug 13, 2019 at 11:32 am

    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.

    Like or Dislike: Thumb up 8 Thumb down 16
  • 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.

    Like or Dislike: Thumb up 2 Thumb down 1
  • “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.

    Like or Dislike: Thumb up 5 Thumb down 1
    • EDITOR on Aug 13, 2019 at 1:48 pm

      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.

      Like or Dislike: Thumb up 10 Thumb down 2
    • Max291 on Aug 13, 2019 at 3:35 pm

      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.

      Like or Dislike: Thumb up 2 Thumb down 0
      • “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…

        Like or Dislike: Thumb up 1 Thumb down 0
      • Heng Lee on Aug 13, 2019 at 4:13 pm

        BTW: A battery replacement for a Tesla Model S is $45.000. Not RM, US$..

        Like or Dislike: Thumb up 1 Thumb down 0
        • EV is the future. But the battery type of EV. It should be hydrogen fuel cell.

          Like or Dislike: Thumb up 0 Thumb down 0
 

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