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China’s declining car sales result of changed customer demands

21. May 2019

The automotive industry in China has suffered a decline, but there seems to be new hope. Sales of new cars have fallen for nine months in a row, by 5.2 percent in March. Nevertheless, numerous electric vehicles were presented by domestic startups and renowned foreign car manufacturers at the current Shanghai Auto Show. According to experts, the new operating concept of the vehicles presented, which is based on smartphones, is attracting new customers. So-called New Energy Vehicles, NEV for short, are vehicles with alternative drive systems and recorded an increase of 62 percent in sales figures last year.

China auto sales

According to Fu Qiang, president and co-founder of the electric car startup Aiways, the reason for the popularity of these vehicles is not only the novel drive, but rather the operating concept: “The gloomy mood in the automotive industry is certainly linked to the general economic situation. But in my opinion, customers are not satisfied with the products on offer at the moment,” said Fu, who was previously President and CEO of Volvo Cars China. According to analysts, the current figures are also very often compared with the rapid growth in 2016. This year’s decline is more due to the saturated market in China’s smaller cities, which prefer predominantly domestic brands, while foreign premium manufacturers are far less affected.

Alan Kang, analyst at LMC Automotive Shanghai, told CNBC that the market will recover this year. Despite cancelled subsidies, Kang estimates that sales of alternative drive vehicles will rise from 1 million units last year to 1.5 million. Young buyers, in particular, who are open to new technologies, are making fundamental changes to the traditional car industry. Electric drives, Internet connectivity and intelligent vehicles are the trends of the future for the automotive industry. The Chinese market is therefore still interesting for car manufacturers and suppliers who want to export their products to China. This requires the obligatory China Compulsory Certification (CCC), for which we are happy to advise you.

For more information on how CCC certification may affect your company, or for more information about CCC certification in general, the process, and the associated costs, please visit our website and our News Section where you will find current updates twice a week.

Please do not hesitate to contact us for further details and consultation. You can contact us via e-mail, or call us (UK: +44 2071931135, Rest of Europe: +49 69 2713769150, US: +1 773 654-2673).

You can also check out our free CCC-Brochure, which can be downloaded right here as a PDF file or you consult our book (in English) “A Brief Guide to CCC: China Compulsory Certification”, which can be found directly here on Amazon.

MPR Author

About the author: Julian Busch is founder and Managing Director of MPR China Certification GmbH
Publisher: MPR China Certification GmbH

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