Coronovirus and its sudden impact on the Chinese economy might be occupying the news headlines, but there are broader changes afoot over the longer term. After many years of enjoying high-speed growth, the automotive industry is facing its third consecutive year of shrinking vehicle sales in China. For foreign vehicle-makers operating in the country, this is a challenging situation, and while most will be planning to tough it out, some could be forced to exit the market – requiring a shift in patterns of production and logistics.
The drop in car sales is linked to the performance of the Chinese economy, which is experiencing a slowdown and suppressed consumer demand for high-value goods. Other factors such as the US/China trade war, market saturation and the accelerated introduction of ‘China VI’ vehicle emissions standards, have also had an impact. While some foreign vehicle-makers are more positive than others about the market outlook, the need to adapt to the new era of low-speed growth in China is important for them all.
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