China’s Car Sales Slump Could Last 3 Years

Wholesales of new cars in China, which have fallen below year-earlier levels for the past 14 months, may not revive significantly until 2022, warns the China Assn. of Automobile Manufacturers.

CAAM predicts a mild upturn in volume late this year. But Shi Jianhua, a senior official with the trade group, tells Reuters that carmakers should expect “low or small negative growth” for the next three years.

Factory shipments to dealers fell 7% to 1.96 million vehicles last month, according to the group. It predicts overall vehicle sales in China this year will drop 5% to 26.68 million cars and trucks. CAAM also expects demand for so-called new-energy vehicles will total 1.5 million units this year, down from an earlier forecast of 1.6 million.

CAAM blames the prolonged downturn on consumer uncertainty caused by the U.S.-China trade war, coupled with rising prices stemming from tougher emission control rules.