New vehicle sales in China went down for three months in a row this August due to a struggling demand caused by an economic downturn and falling stock prices.
The passenger car sales decreased 3.4% to 1.42 million cars last month after a 6.6% decline in July and a 3.4% fall in June. Passenger and commercial vehicles sales also saw a decline of 3% in August to around 1.66 million vehicles, according to a statement from the China Association of Automobile Manufacturers.
After years of growing, the world’s biggest auto market has been dealing with a difficult time as the economy slowed down with the government fighting corruption and more cities advertising against car using to reduce traffic jams and air pollution.
With foreign executives saying earlier this year that sales in China would reach gains only in single digits profit, these estimates seem to look even more optimistic than the reality is. Growth in China’s economy is expected to fall to a low this year that hasn’t been reached in more than two decades. Moreover, stock shares in the country have plunged 40% since mid-June despite efforts from the government to revive purchases of new cars.
SAIC Motor Corp., China’s largest carmaker, estimated a zero growth in sales of passenger and commercial cars this year. The auto group cut back on its previous prediction of 7% growth down to 3% in China’s auto market by the end of this year.
The consulting firm AlixPartners LLP reported Wednesday that it is expecting low percentages growth to be the new normal for China’s automarket, with sales going up 4.1% every year through 2018 and then lowering to 2.9% for the following five years.