China auto sales drop for 17th straight month in November

BEIJING/SHANGHAI (Reuters) - Auto sales in China fell for a 17th consecutive month in November, with the number of new energy vehicles (NEVs) sold contracting for a fifth month in a row, data from its biggest auto industry association showed on Tuesday.

FILE PHOTO: Cars for export wait to be loaded onto cargo vessels at a port in Lianyungang, Jiangsu province, China October 14, 2019. REUTERS/Stringer

Total auto sales in the world’s biggest auto market fell 3.6% from the same month a year earlier, the China Association of Automobile Manufacturers (CAAM) said.

That follows a drop of 4% in October and 5.2% in September. Car sales in the country contracted last year for the first time since the 1990s against a backdrop of slowing economic growth and a crippling Sino-U.S. trade war.

“The China 5-6 emission standard change is the biggest reason for this year’s sales plunge,” said Chen Shihua, deputy secretary general at CAAM, referring to how local governments had accelerated changes to emission standards this year.

He added that overall car production levels were now returning to normal and carmakers had boosted their product line-ups in the past few months.

In November, sales of NEVs fell 43.7%, CAAM said, following a 45.6% drop in October. NEV sales had jumped almost 62% last year even as the broader auto market contracted.

NEVs include plug-in hybrids, battery-only electric vehicles and those powered by hydrogen fuel cells.

China has been a keen supporter of NEVs and has implemented sales quota requirements for automakers. But it cut subsidies this year and plans to phase them out after 2020 amid criticism that some firms have become overly reliant on the funds, making NEVs costlier and dampening demand.

“Next year there will be different NEV manufacturing quotas for carmakers. I think next year will also be an adjustment period and sales of new energy vehicle will be better than this year,” said Xu Haidong, assistant secretary general at CAAM.

The prolonged car sales crisis has made global car makers from Ford F.N to PSA [PEUPFI.UL] cut China production plans.

Geely 0175.HK, China's best known car maker globally, said sales rose 1% year-on-year in November while China's biggest carmaker SAIC Motor 600104.SS saw a 9.6% drop due to poor performance from joint ventures with General Motors GM.N.

NEV sales at both BYD 002594.SZ and BAIC's electric vehicle unit BluePark 600733.SS, in which Daimler DAIGn.DE has a stake, fell around 63% last month from a year ago.

Reporting by Yilei Sun in Beijing and Brenda Goh in Shanghai; Editing by Himani Sarkar & Kim Coghill