Again fewer sales: China's auto market cannot iron out the dent

Monday, January 11, 2021

Again fewer sales
China's auto market cannot iron out the dent

The most populous country in the world has the most important market for many automakers. But it is shrinking for the third year in a row. The reason is Corona, even if China claims to get the disease tamed early on. For 2021, however, the country expects more car sales again.

China's car sales fell for the third year in a row in view of the slump in sales at the start of the year due to the 2020 corona pandemic. According to the data from the Chinese manufacturers' association, the strong recovery since summer could not offset the decline. Overall, sales on the world's largest car market plummeted by 6.8 percent. A total of 19.6 million vehicles were handed over to customers last year.

The Chinese market is by far the most important single market for Volkswagen (including the subsidiaries Audi and Porsche) as well as Daimler and BMW. The market had already shrunk in 2018 and 2019 after decades of growth.

The prospects for the new year are good. According to the association, growth will be strong in 2021, and last month it had announced a plus of seven percent for this year. The prospects for the market for electric cars are particularly good. In December alone, sales of electrified cars rose by 58 percent to 206,000 units.

The background to the boom are further government incentives to buy. Beijing wants to increase the share of electrified vehicles in total car sales to 20 percent by 2025 from around 5 percent at present. Many support payments are to be cut by a fifth this year and will expire entirely by 2022.