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Auto industry cautious as China starts year with 2% sales decline forecast

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China auto sales fall again in 2019 amid trade war

It was another down year for vehicle sales in China as a trade war with Washington and an economic slowdown fueled consumer anxiety and demand for electric vehicles weakened, an industry group reported Monday.

Predictions for the future of the Chinese market do not make pleasant reading for either Ford or Tesla, with the China Association of Automobile Manufacturers (CAAM) forecasting that the auto market will shrink by 2% in 2020 as the Chinese economy weakens and the Trade War with the United States continues to rumble on.

Ford saw its December sales fall 14.7% during the final month of the year, as it continues to grapple with updating its vehicle line-up.

On Monday, Ford said its China auto sales slumped more than a quarter in 2019 for a third year of decline.

After two decades of explosive growth, Chinese auto sales fell 4.1 percent in 2018 as unease over the tariff war with President Donald Trump and slowing economic growth prompted consumers to put off big purchases.

Sales of so-called new-energy vehicles dropped 4 percent previous year to 1.2 million units. The drop in vehicle sales is expected to be milder than past year, when sales were pressured due to new emission standards in a broader economy that was both shrinking and under attack amid a trade war with the United States. The group gave no sales total in December, but based on other data, it would be around 2.2 million vehicles.

Executives at carmakers such as Geely and Ford Motor Co partner Chongqing Changan Automobile Co Ltd have said they expect fiercer competition to weed out weaker players.

China continues to be a hard market for the Ford Motor Co.

The U.S. automaker has been hit by the same factorS that also slammed GM's sales there. In total, it sold 567,854 vehicles in 2019. Sales sank 37 percent in 2018, after a 6 percent decline in 2017.

The recession is pushing global and Chinese auto makers at a time when they are spending billions of dollars to meet government targets for selling electric vehicles.

Ford has been struggling to revive sales in China after its business began slumping in late 2017.

Models launched in the fourth quarter include a new Ford Escape version - for which the automaker said orders received so far have been much higher than expected - and the Lincoln Corsair, the first localized Lincoln model in China.

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