BEIJING -- Auto sales in China dropped 0.5% on the year to 1,994,500 in April, the China Association of Automobile Manufacturers said Monday.
This marks the first decline since a 1.8% slip in September 2012 linked to anti-Japan demonstrations -- excluding the January-February period, when sales fluctuate because of the Chinese New Year holidays.
China's new-car market expanded rapidly into mid-2014, then lost momentum as signs of an economic slowdown surfaced. In March, sales increased by just 3.3% on the year.
With major automakers such as Volkswagen from Germany and General Motors of the U.S. raising capacity in China, concern over a supply glut is growing, too. This fuels worries that the slowdown in April is unlikely to be temporary.
Commercial vehicle sales plunged 17.6% in April as companies refrained from buying trucks and vans amid earnings deterioration. Passenger vehicle sales rose only 3.7% as consumers held back based on uncertainty over the economy.
"Customer traffic is not picking up despite big discounts, and inventory keeps piling up," a Nissan dealership staffer said, noting that many dealerships have two to three months of inventory, more than double the appropriate level.