Car sales in China continue to decline: Like the property market, China’s auto sector is experiencing a major revenue decline. Vehicle sales fell for a third consecutive month in August, reflecting the current economic challenges. Data released Tuesday showed that domestic demand for passenger and family cars has weakened due to low consumer spending. Total vehicle sales, including exports, saw a 5 percent year-on-year decline, now standing at 2.45 million units, Nikkei Asia reported.
The China Association of Automobile Manufacturers (CAAM) revealed that domestic passenger car sales fell 9.4 percent to 1.74 million units. Citing CAAM data, Nikkei Asia highlighted how falling consumer confidence is playing a central role in the downturn.
To counter these trends, the Chinese government offers subsidies to encourage the sale of new cars and replace older vehicles. However, these incentives have not been enough to reverse the sales decline. Sales of gasoline-powered vehicles took a severe hit, falling 34.1 percent to just 795,000 units.
This drop is indicative of a broader trend in the market, where electric and hybrid vehicles are slowly gaining ground. At the same time, commercial vehicle sales also suffered, falling by 20.9 percent to 198,000 units.
The decline in commercial vehicle sales is closely linked to weak investment in infrastructure construction and deteriorating real estate sector, which has become a major drag on the overall economy. Lower construction activity directly affects demand for commercial transport, leading to lower sales, Nikkei Asia reported.
Meanwhile, China Evergrande New Energy Vehicle Group (CENEVG), an electric vehicle unit of the Evergrande Group, is facing severe financial problems. The company is in the process of bankruptcy and has started talks with potential buyers. The situation has only gotten worse as creditors are now demanding repayment of huge debts.
A Chinese court recently heard a request from creditors claiming huge financial losses, further complicating Evergrande’s financial situation. Liquidators are demanding billions of dollars from Evergrande’s top executives, including the company’s founder, Hui Ka-Yan.
The troubles at Evergrande’s electric vehicle division highlight broader financial instability in China’s property development sector, adding to concerns about the country’s economic outlook.
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