FAST FIVE: China Auto Sales Just Posted Their Worst Month Ever
China's automobile market has continued to catalyze the global auto recession, posting its worst sales month in history for May according to the China Association of Automobile Manufacturers (CAAM).
“We gave the manufacturers too little time to prepare,” he continued, also noting that May's drop in demand was attributable to a “decline in purchasing power in the low-to-middle income groups as well as expectations of government stimulus to encourage purchases.” Passenger vehicles were crushed lower for the 12th straight month, according to the Passenger Car Association (“PCA”).
EV sales were up 62% last year despite the broader auto market slowing. May's drop now marks an entire year of falling sales.
The future turned even gloomier when outgoing Daimler CEO Dieter Zetsche said last month that “sweeping cost reductions” are coming to prepare for what he is calling “unprecedented” industry disruption.
Bank of America Merrill Lynch analyst John Murphy said at the same time: “The industry is right now staring down the barrel of what we think is going to be a significant downturn. The pace of decline in China is a real surprise.” Bank of America had also commented that “the auto cycle has peaked” in a note put out about a week ago. Global automakers have invested billions, betting that China would continue to grow, even in the face of pronounced slowdowns in Europe in North America.