Auto Industry Cautious About China's Sluggish Market At Start Of The Decade

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USA auto giant Ford Motor Co. on Monday reported its China vehicle sales fell for a third consecutive year, by 26.1 percent in 2019.

"The pressure from the external environment and downward trend of the industry volume will continue in 2020", said the CEO of Ford Greater China, Anning Chen, in a statement.

As China represents around one third of the global auto market, the decline in sales of fossil vehicles is a good omen for progress in the areas of pollution, climate and fossil fuel conflicts.

Sales of new-energy vehicles (NEV) sank 27.4% in December, resulting in an overall 4% decline in 2019.

After a three-month transition period that ended on June 25 past year, local governments stopped subsidizing purchases of NEVs other than new energy buses and fuel cell vehicles, resulting in sharper declines of NEVs sales in the latter half of 2019. Annual sales started falling in 2018, by 2.8 per cent, halting a growth march that started in the 1990s.

Top executives in companies such as Geely and Ford Motor Co partner Chongqing Changan Automobile Co Ltd have said they expect fiercer competition to weed out weaker players.

The company's main problem is its outdated product lineup, said Yale Zhang, head of Shanghai-based consulting firm Automotive Foresight.

For example, Ford hasn't updated its midsize Mondeo sedan-known as the Fusion in the US -or about two years.

Sales in the industry's largest global market fell 9.6% from the 2018 level to 21.4 million sedans, SUVs and minivans, according to the China Association of Automobile Manufacturers.

In addition, analysts have said, Ford's vehicles lack some features that appeal to Chinese buyers, including internet connectivity and large touch screens. Sales declined 14.7 percent in the final quarter of 2019. The company reports fourth-quarter and full-year 2019 results on February 4.

"The easing of trade tensions between China and the United States has also helped restore consumer confidence", said Kang, who expects vehicle sales in China to grow 0.05% this year.

The automaker plans to launch more than 30 new models in China over the next three years of which over a third will be electric vehicles. That would be an improvement over double-digit declines in previous months.

Raffaele Huang in Beijing and Mike Colias in Detroit contributed to this article.

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