New vehicle sales in China fell by over 4% to 1.89 million units in July from 1.97 million units a year earlier, according to data released by the China Association of Automobile Manufacturers (CAAM).
This follows strong gains in the previous months as the country continued to enjoy strong economic growth of around 6.7% in the second quarter. Vehicle sales in the first seven months of the year were up by 4.2% at 15.96 million units compared with 15.33 million units in the same period of last year.
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Weakening demand for passenger vehicles last month led to a sharp rise in dealer inventories to 2.6 times average monthly sales, or an additional 150,000 units in total, according to the association.
Sales of commercial vehicles continued to rise in July, albeit by just 3.3%, but were up by almost 10% at 2.59 million units year-to-date.
Sales of new-energy vehicles (NEVs), comprising mainly electric vehicles, rose by almost 48% to 84,000 in July despite recent cuts in subsidies, but were up by over 97% at 496,000 units in the seven-month period.
Vehicle imports jumped by close to 50% to 165,000 units in July, according to separate data from the customs department, after import tariffs were cut at the beginning of July from 25% to 15%.
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By GlobalDataCAAM still expects the overall vehicle market to expand by 3% to close to 30 million units this year, including 1 million NEVs, despite rising trade tensions with the US.
See also: Global automotive market report – Q2 2018
