Chinese-brand vehicle sales slump in August

Chinese-brand vehicle sales in the passenger car market stood at 684,000 units in August, down 11.1 percent year-on-year and falling by 2.8 percentage points to a 38.2 percent of total market sales. This is the lowest in four years, according to the China Association of Automobile Manufactures.

Chen Shihua, assistant to CAAM's secretary-general, said the 40 percent market share is an important symbol of the market condition for self-owned brands. "When the market is not performing well, those companies are under pressure in terms of their product," Chen said.

Passenger car sales fell 4.6 percent in August to 1.79 million units from a year earlier, and sales of sedans, SUVs and MPVs decreased by 3.4 percent, 4.7 percent and 13.6 percent respectively compared to a year before.

The sales decline of SUVs, especially Chinese brands, reflects the changing needs of customers in China's fifth- or sixth-tier cities. "The low-end self-owned SUVs target people in those cities, which contribute to the increase in China's auto market, and that's why the total automobile sales fall," Xu Haidong, another assistant to CAAM secretary-general, said.

In addition, since the beginning of this year, luxury cars captured the market of joint venture brands through price cuts, which leads to competition with self-owned brands through further price reduction. Those local brands, however, cannot afford to reduce their price to a lower level, Beijing Business Today reported.

"Those weak companies may fall, and there will be mergers and acquisitions in the end," Xu said.