GUANGZHOU -- Chinese continued to hold off on new-auto purchases in April even after car companies cut prices, as uncertainty clouds the economic outlook amid a trade war with the U.S.
Sales fell 14.6% from a year earlier to slightly more than 1.98 million vehicles in figures released Monday by the China Association of Automobile Manufacturers. This extended the downtrend into its 10th straight month and marked a slide into double-digit declines following a roughly 5% drop in March.
Hopes of improvement had been high for April. The government cut the value-added tax for manufacturers to 13% from 16%, and many automakers lowered prices between 2% and 3% to pass along the benefits to customers. But this failed to drive up sales.
Sales of passenger vehicles, which account for about 80% of the market, fell 17.7%.
Geely Automobile Holdings suffered a reversal as its global sales tumbled 19.3%. Most of the company's sales are made in China.
"The economy isn't doing well, and right now the market seems saturated," a salesperson at a dealership in Guangzhou said.
American and European players had a particularly tough month. General Motors saw joint venture SAIC General Motors suffer a 26.7% drop. At Volkswagen, FAW-Volkswagen emerged little changed with a 0.3% fall, but SAIC Volkswagen booked a 10.5% decline.
The Chinese market will likely recover in the second half as tax cuts and other measures start to take full effect, a senior executive at a Japanese-owned automaker predicts. But many others say that the downturn is likely to continue with the prolonged Sino-American trade war.