Weak demand in core markets continues to hurt China’s domestic automakers
Slow sales in key markets like Russia and Ukraine caused vehicle exports to fall 11% year on year in May to just 38,100 units, according to data from the China Association of Automobile Manufacturers.
Many of China’s leading carmakers are feeling the pinch from both sides, with struggling exports and an eroding domestic market share affecting revenue growth. While CAAM remain optimistic that the auto market will track GDP growth this year at around 6-7%, sales of light vehicles grew by just 1.2% in May.
Geely Automobile Holdings saw shipments decline by 34% to 4,164 units during the same period, with sales at Geely subsidiary, Volvo, also down by 2% as the auto market cools.
Meanwhile, shipments from Great Wall Motor Co, China’s largest SUV maker, also slid 45% to just 3,447 vehicles last month.
Not all of China’s automakers are faring badly. State-owned Chery Automobile Co actually saw domestic sales increase by 4% to 455,380 during the period, while unit yields also grew by 63% to an average value of 80,000 yuan ($13,000). However, profits slid as a whole as costly foreign ventures continued to burden the firm’s balance sheet.