BEIJING—Chinese auto sales fell for the 17th straight month in November, though the pace of decline eased, as the world’s biggest auto market becomes more saturated and a slowing economy sees buyers cut spending.
Auto sales fell 3.6% last month from a year earlier to 2.46 million vehicles, the government-backed China Association of Automobile Manufacturers said Tuesday. It marked a slight improvement from October’s 4.0% year-over-year drop.
The prolonged slump in auto sales underscores a new reality in a market where car sales grew constantly for nearly three decades—at times by double-digit percentages from the year before. Industry executives, analysts and dealers have cited various factors for the industry doldrums, including a saturation of cars in the market, policy changes such as a recent shift to tougher emissions standards and a sluggish economy where consumers are paying more for other necessities and have less to spend on cars.
The pain has been pronounced for U.S. auto makers. Through the first 11 months of the year, the combined market share for American companies—most notably Ford Motor Co. and General Motors Co. —shrank by 1.5 percentage points, while those of German and Japanese car makers grew, CAAM data showed. Chinese auto makers’ combined share fell 3 percentage points during the same period.
Chen Shihua, deputy secretary-general of the auto industry association, said the recent easing in the pace of the sales decline is a sign that car makers have been able to adjust their production to meet a tougher emissions standard that was introduced in many areas across the country in July.
The shift to the new standard was a messy transition for auto manufacturers and caused confusion for dealers, many of whom tried to sell off vehicles that didn’t meet the new standards.
Mr. Chen said the overall market is still far from recovery considering the macroeconomy, and next year it will continue to face great pressure. Many analysts expect flat or negligible growth for overall auto sales in China next year.
Some foreign auto makers have been particularly hard hit. France’s PSA Group, which makes Peugeot-brand cars, recently said it is preparing to sell off its stake in a joint venture with one of its Chinese partners, Chongqing Changan Automobile Co. Changan is also planning to exit from the venture, according to a recent filing by the Shenzhen-listed company.
Another factor behind the continued decline is weak sales of new-energy vehicles, a category that includes electric cars, after the government halted most subsidies at the end of June. Sales of new-energy vehicles dropped for the fifth consecutive month, by 43.7% to 95,000 vehicles, in November.
While January-November new energy vehicle sales rose 1.3% from the same period last year, CAAM’s Mr. Chen said full-year sales are likely to be lower compared with 2018.
In a signal China isn’t giving up on electric-vehicle adoption in its broader battle against pollution, the government said this month it hopes new-energy vehicles will account for about a quarter of all new vehicle sales by 2025. The target, released by China’s Ministry of Industry and Information Technology in a draft industry-development blueprint, was raised from an earlier goal of 20% or more.
Analysts said the draft target is a sign that the government is still serious about pushing for broad adoption of environmentally friendly cars in China, even as some industry players have grown pessimistic following the recent months’ sales plunge.
“The government is really showing determination—this is the road, this is the way,” said Yale Zhang, an analyst at Automotive Foresight.
—Raffaele Huang and Yoko Kubota in Beijing
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