China car sales drop as economic woes and US trade war hit buyers

Bloomberg

China’s car sales fell for a third straight month as an intensifying trade dispute with the US and slowing economic growth are threatening to end the vehicle market’s almost three-decade expansion.
Retail sales of cars, SUVs and multipurpose vehicles declined 7.4 percent to 1.76 million units in August, the China Passenger Car Association said in a statement. That compares with a
5.4 percent drop in July, and brings the year-to-date growth in the world’s biggest car market to 0.8 percent.
Consumers are getting more cautious about spending on big-ticket items as China’s economy slows, hitting a car market led by Volkswagen AG and General Motors Co. The intensifying trade war is also having an impact: while just a small fraction of cars sold in China are imports, the higher retaliatory tariffs imposed by China on US-made cars are causing pricing uncertainties, keeping consumers away from showrooms.
“Winter is coming” for China’s car market, said Cui Dongshu, secretary general of the association. “Demand for SUVs may continue to slide through the year.”
Sales of SUVs, which have fueled China’s car demand for the past decade, fell 8.5 percent last month, the third year-on-year decline since May. Shoppers may be choosing cheaper and
more fuel-efficient models amid concerns over the economy. The yuan has declined this year and stocks in Shanghai have slumped 18 percent since the start of 2018.