Photo/Shetuwang

Jan. 22 (NBD) – China's car sales dropped for the first time in 28 years last year. Amid the sluggish vehicle market and increasingly fierce competition, Chinese self-owned car brands had a tough time.

Statistics from China Association of Automobile Manufacturers (CAAM)showed sales volume of passenger cars from self-owned brands was only 9.9799 million units in 2018, falling by 7.99 percent year on year. This marks the first time in nearly three years the sales volume slipped below 10 million units.

Among the top 20 self-owned car vendors, only Geely, SAIC Motor Passenger Vehicle Company, GAC Group-backed Trumpchi, BYD Company and BAIC BJEV registered positive sales growth last year. 

Market share of self-owned car brands also plunged to 42.1 percent in 2018 from 43.9 percent in 2017. Xu Haidong, assistant secretary-general of CAAM, said to the 21st Century Business Herald the market share acquired by China's self-owned car brands is expected to fall below 40 percent in 2019.

The dip of self-owned vehicle sales in 2018 can be partly attributed to the stagnated SUV market. According to the Ministry of Industry and Information Technology, only 9.995 million SUVs were sold in China last year, a year-on-year decrease of 2.5 percent.

Shi Jianhua, deputy secretary of CAAM, noted the SUV market, especially the mid- and high-end SUV market, still boasts room for further growth. Shi forecasted there will be more intense competition among fewer self-owned car brands.

At the same time, self-owned car vendors may place their bets on new energy vehicles (NEVs). Contrary to the dismal traditional car market, the NEV market still kept a good momentum for growth in 2018. Data from CAAM indicated the sales volume of new energy passenger vehicles in 2018 reached 1.053 million units, topping the 1 million mark for the first time and rising by 82 percent over the prior year. Among these passenger NEVs, more than 95 percent were manufactured by self-owned brands.

Cui Dongshu, secretary-general of the China Passenger Car Association, stated that the sales volume of NEVs was better than expected and the dual-credit scheme has brought positive effects. In order to decrease the fuel consumption, carmakers expanded efforts on NEVs, promoting NEVs to be more diversified.

With regard to the future of the NEV market, Yu Jingmin, deputy general manager at SAIC Motor Passenger Vehicle Company, told the 21st Century Business Herald that NEV players will compete for the market share in cities without license plate quotas, where more than half of the company's NEVs were sold last year, since affordable price makes self-owned car makers more competitive in third-tier and smaller cities.

But NEV subsidies will possibly be sharply slashed in 2019, posing more challenges to self-owned car brands. As the dual-credit scheme places great pressure on auto joint ventures, more new players will enter the battlefield.

Email: wenqiao@nbd.com.cn