Auto sales fail to rev up in April

A visitor at the auto show in Shanghai in April. In the first four months of this year, auto sales in the country stood at 7.27 million, a drop of 1.4 percent year-on-year. YIN LIQIN / FOR CHINA DAILY

China's passenger car market in April continued the lackluster performance seen in the first quarter, further denting the confidence of automotive industry players.

Sales of sedans, SUVs, MPVs and minivans totaled 1.69 million units in the month, a 1.7 percent fall from the same month last year, statistics from the China Passenger Car Association showed.

Sales so far this year totaled 7.27 million, a 1.4 percent dip year-on-year. The fall could have been steeper without SUVs, whose sales grew 17.2 percent in the same period. It was the only growing segment in the first four months of the year, while other segments fell, ranging from 8.1 percent to 32.3 percent.

The poor sales have forced the association to cut its estimate of the year's growth to 5 percent year-on-year from 6.5 percent at the end of last year. In contrast, the passenger car market in 2016 saw 18 percent growth year-on-year.

"Under such circumstances, we had to adjust the estimate, as April's performance was unexpected for us," said Cui Dongshu, the association's secretary-general, on Tuesday.

"It is known to every one that the tax incentive is having its impact on the market, but we had expected car sales to return to a reasonable level after the first quarter, but unfortunately they did not."

He said that growing interest in the property market, especially in smaller cities, is one factor to blame for this. "Everyone believes house prices are rising and it is already a pattern that people buy houses before they buy cars."

Yale Zhang, managing director of consulting firm Automotive Foresight, said the Shanghai auto show last month probably also played a role. "Some potential buyers may have kept their money because they wanted to see what automakers would offer in the coming months."

Faced with negative growth, carmakers were reducing their stocks as part of a strategy to alleviate car dealers' worries about the market.

Statistics from the China Passenger Car Association showed the sales in April were 1.72 million, down from 2.09 million in March, and 1.78 million from the same period last year.

However, Cui does not expect the move to have any immediate impact on sales.

He was echoed by Lang Xuehong, a deputy secretary-general of the China Automobile Dealers Association.

"Considering the sales so far, dealers will have a lot of pressure to catch up soon," said Lang.