The Chinese car market fell back by 1.4% in the month of April according to data released by the China Passenger Car Association.
The trade association said that retail sales of cars, sport utility vehicles and multipurpose vehicles in the world’s largest vehicle market fell 1.7% to 1.69m units in April.
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Bloomberg reported that a major factor behind the slip was much-reduced sales by Hyundai-Kia, as consumers avoid Korean brands due to a diplomatic dispute and geopolitical tensions between South Korea and China. Analysts say that consumers are either putting off purchases of Korean branded cars – which account for around 5% of the market – or turning instead to domestic brands. However, the net effect is to take the overall market down.
Bloomberg reported that Kia’s China sales fell more than 60% to 16,050 units in April.
The fallout could last as long as a year despite possible efforts by the newly elected South Korean president to repair ties with China, said Steve Man, an analyst at Bloomberg Intelligence.
Bloomberg reported that despite the market decline, the SUV segment continued to post growth last month. It said SUV sales rose 15% to 689,387 units. However, sedan deliveries slid 3.9% to 836,425 units and MPVs/minivans fell 24% to 135,178 units.
For the first four months, overall passenger car deliveries slid 1.4% to 7.27m units.
China’s economy grew by around 6.7% in 2016 and is forecast to post similar growth in 2017. However, worries over high levels of consumer credit/debt could provoke official policies to reduce growth in 2018, analysts say.
