China car market reports signs of improvement in March

Sales expected to turn the corner into growth by middle of the year

China's auto market is showing signs of recovery with the drop in sales in March smaller than in recent months, and it is expected to stop declining completely by the middle of the year, officials of the country's leading auto industry association said.

According to statistics from the China Association of Automobile Manufacturers released on Friday, vehicle sales in March were 2.52 million units, falling 5.18 percent year-on-year but increasing 70.09 percent compared with February.

Total vehicle sales in first quarter stood at 6.37 million units with a decrease of 11.32 percent compared with last year.

Passenger cars, accounting for the majority of vehicle sales, saw a fall last month of 6.88 percent year-on-year with deliveries of 2.02 million units. The sales however, were up 65.6 percent compared with February.

The association said that the recovery is being led by carmakers offering sales promotions and increased production in March.

Xu Haidong, an assistant to the CAAM's secretary-general said that the complete recovery will still depend on consumer demand. He forecast that the auto market will return to growth in July or August.

Despite being a small part of the whole industry, commercial vehicles performed well in March reaching a new sales high with 500,600 units sold - a year-on-year increase of 2.36 percent and month-to-month increase of 91 percent.

Chen Shihua, another assistant to the CAAM's secretary-general, said that the growth of commercial vehicle sales has a great deal to do with national environmental protection measures.

Chen said that many regions have eliminated trucks that do not meet National III emissions standards, and provided subsidies to those that do meet the standards. Sales were also boosted by the growth in infrastructure construction projects started since the second half of last year.

New energy vehicle sales are cruising at high speed, with pure electric and plug-in hybrids selling 299,000 units from January to March, up 109.7 percent compared with same period last year, including 125,600 units sold in March.

Most new energy vehicle prices have remained stable despite China slashing its subsidies on them in late March. "The new energy vehicle market in China has entered a relatively rational stage for both consumers and manufacturers, when the impact of subsidies will be smaller," Xu said.

Carmakers should not care so much about short-term earnings and hastily adjust their car prices, but instead seek long-term development, he added.

Automakers' long-term plans will be showcased at the forthcoming Shanghai auto show.

A total of 45 models from SAIC GM with its Buick, Chevrolet and Cadillac brands will be on display at the show, including the Velite 6, Buick's first pure-electric vehicle. The large-sized SUV XT6 from luxury brand Cadillac will also make its Asian debut.

Ford Motor will showcase a strong product lineup, with four models making their China premiere.

The new models come as the carmaker's Chinese joint venture, Changan Ford, comes o0 a decline in sales of 54 percent year-on-year in 2018. The company will display six new models for China at the auto show, including the Escape, the new Focus and new Kuga.

BAIC Group will showcase its intelligent connected system and its electric vehicle manufacturer, Beijing New Energy Vehicle, will unveil three models under its high-end brand Arcfox for the first time in China.

In the first quarter, BAIC Group sold 573,000 units with an increase of 3.7 percent in the same period year-on-year. The sales of its new energy brand reached 25,000 in the first three months, according to statistics from the group.

British luxury carmaker Bentley will showcase its hybrid Bentayga, the first electric SUV and first hybrid vehicle for the brand.

Aston Martin will unveil its first pure-electric Rapide E with a range of 321.9 kilometers.