Bumpy road to an electric future
Major car giants buckle up for the Shanghai Auto Show
2019 Shanghai Auto Show
Visitors look at an Icona Nucleus self-driving electric concept car at the Shanghai Auto Show.
Photo: AFP/ Greg Baker
Global car giants will flock to the Shanghai Auto Show this week just as China faces a sales slump and veers toward an ultra-competitive electric future.
Fuelled by rising incomes and government sales incentives, the world’s second-largest economy is crucial to the global automotive industry.
But after years of strong growth, car sales fell last year for the first time since the 1990s, hit by a slowing economy, US trade tension, and a Chinese crackdown on shady credit practices that crimped car-financing channels.
Sales dipped 2.8% in 2018 to 28.1 million units, according to that China Association of Automobile Manufacturers, a pace that has accelerated in recent months.
“This is the first time since the takeoff of the Chinese market that there has been such a long and sharp decline in sales,” Laurent Petizon, an auto analyst at Alix Partners, said. “We are starting to worry a little bit. It’s a new phenomenon.”
Still, major carmakers see solid potential, particularly in bright spots such as SUVs and electric vehicles, which will account for many of the new models on display in Shanghai.
“The situation will slowly improve. Next year, the market will recover little by little and in three to four years, will have resumed its earlier growth,” Ferdinand Dudenhoeffer, director of the Germany-based Center of Automotive Research, said.