China's auto sales contraction worsens in February

People ride bicycles past new Honda cars stored underneath an overpass in Beijing, Thursday, March 14, 2019. The downturn in China's auto market worsened in January and February as an economic slowdown and a tariff fight with Washington chilled demand in the industry's biggest global market. Sales of SUVs, minivans, and sedans plunged 17.5 percent from a year earlier to 3.2 million SUVs, minivans and sedans in the first two months of 2019, according to an industry group, the China Association of Auto Manufacturers. (AP Photo/Andy Wong)

China's auto sales in January and February contract 17.5 percent over a year ago as contraction in industry's biggest market worsens

BEIJING — The downturn in China's auto market worsened in January and February as an economic slowdown and a tariff fight with Washington chilled demand in the industry's biggest global market.

Sales of SUVs, minivans and sedans plunged 17.5 percent from a year earlier to 3.2 million SUVs, minivans and sedans in the first two months of 2019, according to an industry group, the China Association of Auto Manufacturers. Total vehicle sales, including trucks and buses, fell 15 percent to 3.8 million units.

The drop in sales of passenger cars in January was 15 percent.

Economists and industrial analysts often combine the first two months of the year when looking at consumer activity to screen out the effect of the Lunar New Year holiday, when factories close for up to two weeks and commercial activity falls.

Chinese consumers are putting off big purchases amid an economic downturn that saw growth last year fall to a three-decade low of 6.6 percent. Trade tension with Washington is fueling consumer jitters.

The auto slump is squeezing revenue for global and Chinese automakers that are spending heavily to meet government targets to develop electric vehicles.

Last year's auto sales suffered their first decline in nearly three decades, calling 4.1 percent from 2017 year to 23.7 million.

The downturn has prompted suggestions Beijing will cut sales taxes or offer other incentives.

Sales by Chinese brands fell 23 percent to 1.3 million units in January and February, according to CAAM. Market share for Chinese brands shrank by 3 percent compared with the same time last year to 41.8 percent.

Growth in sales of pure-electric and hybrid vehicles, which Beijing is promoting with subsidies, rose 98.9 percent over a year ago to 148,000 units.

Sales of SUVs, usually a bright spot for the industry, contracted 18.6 percent to 141,000.

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