(Yicai Global) March 23 -- Car sales in China have fallen so far this month despite more than 40 producers having joined the fierce price war in the world’s biggest auto market.
Total retail sales of passenger cars stood at 700,000 units in the first three weeks of March, down 8 percent from a year earlier and 4 percent from the same period in February, data from the China Passenger Car Association showed yesterday. Some 746,000 were wholesaled, down 13 percent from a year ago and unchanged from the month before.
US electric vehicle giant Tesla sparked China’s auto price war in January. Since then, more than 40 auto brands have followed suit with discounts and subsidies, Ries Positioning Strategy and Consulting said in a report yesterday.
Purchasing power has not been unleashed as effectively as imagined, with buyers taking a strong wait-and-see attitude, CPCA Secretary-General Cui Dongshu told Yicai Global. The nation’s auto market may grow this month, but that would more likely be the result of the lower base last year than price cuts, Cui said.
“Vendors have trimmed prices for different reasons and will end them at different times,” Mu Feng, president of Chinese carmaker Great Wall Motors, told Yicai Global. “If the reasons become unsustainable, the war will not continue.”
The China Association of Automobile Manufacturers recently called on all parties to handle the vehicle promotion campaign sensibly so the market can return to normal as soon as possible.
It is not sustainable for fuel vehicle brands to slash prices to buoy sales, said Wu Xiaowei, senior analyst at Ries. Instead, they should accelerate the transition into the new energy field, as traditional carmakers such as Citroën cannot regain popularity through price cuts.
Price cuts have drawn the attention of many potential buyers. The page of the Citroën C6 receives over 1.2 million daily viewers on average now, versus less than 10,000 before the cuts, according to data from auto industry platform Dongchedi. A car dealer in Beijing told Yicai Global that the number of showroom visitors has increased, but orders have not grown much.
Editors: Shi Yi, Futura Costaglione