Chinese Auto Sales Fall for Second Month in August

September 11, 2018 Updated: October 2, 2018

BEIJING—Chinese auto sales fell for a second month in August, an industry group reported on Sept. 11, adding to signs of economic malaise amid a worsening tariff battle with Washington.

Sales of SUVs, sedans, and minivans in the biggest global auto market contracted by 4.6 percent from a year earlier to 1.8 million units, according to the China Association of Automobile Manufacturers. Total vehicle sales, including trucks and buses, sank 2.1 percent to 2 million units.

Chinese auto demand has cooled as economic growth has slowed after Beijing tightened controls on bank lending to cool surging debt.

Sales of SUVs, usually the industry’s brightest spot, shrank 4.7 percent to 737,000 units. Sedan sales were down 3.4 percent at 901,000.

Total auto sales for the first eight months of the year gained 2.6 percent to 15.2 million.

Sales growth has declined steadily, tumbling from May’s 7.9 percent to 2.3 percent in June. Full-year 2017 sales growth was 1.4 percent.

China’s mounting tariff fight with the U.S. administration over Beijing’s intellectual property theft has added to anxiety.

Weak demand is a setback for global automakers that look to China to drive revenue and are spending heavily to develop models for local tastes.

Beijing imposed 25 percent import duties on U.S.-made autos as part of its retaliation for a similar American tariffs. But that falls most heavily on BMW AG’s imports of SUVs from a South Carolina factory. American brands produce most of their vehicles in Chinese factories.

As part of industrial plans to develop high-tech sectors and eventually supplant global tech supply chains, Beijing is promoting electric car development. Automakers are rolling out dozens of electrics but still rely on sales of gasoline-powered models for their profits.

In August, Nissan Motor Co. began production of its first electric sedan designed for China. The Sylphy Zero Emission, based on Nissan’s Leaf, is the first of a dozen of lower-cost electrics being developed for China by General Motors, Volkswagen, and other global automakers.