Auto sales in China, a key measure in economic health, fell for the first time in about two decades, as the China auto consulting firm Zozogo sees 2019 as a year of more downside. Auto sales fell 3 percent in 2018, the first decline in recent memory has been especially painful for US auto manufacturers, as automakers sold 28 million cars in 2018, compared to about 17 million in the US, the second largest market. This market is being hit by trade tensions and growing concerns about the economy as consumers see an economic slowdown becoming reality in the near future – have a look at Classiarius piece on the 2019 economy.
The auto market in China, usually a source of growth for the industry is expected to fall another five percent in 2019, as the consumer starts to tighten his and her wallet. The slowing economy is putting into question, job security, something that China has not experienced in the past. US-China trade tensions are also a key driver of market sentiment.
GM has been doing well in China while Ford has had challenges turning out enough product. Note that we saw Apple sales drop in China in the past quarter sending its stock tumbling by seven percent. So we now see that both mob phones and autos are two industries that are being hit by a global and China specific slowdown.
More on this topic in the coming weeks and months