SHANGHAI (Reuters) – China’s car market will return to growth in the second half of this year due to government support although the days of high single or double-digit growth are over and consolidation is likely, senior automotive executives said on Tuesday.
The predictions from executives including the head of Mitsubishi Motors on the first day of the Shanghai Autoshow point to a vehicle market that is heading for more balanced growth, especially if the trade war with the U.S. is resolved.
Automotive sales in China contracted for the first time last year since the 1990s as a slowing economy and the trade friction between Beijing and Washington affected consumer sentiment.
Recent moves by the Chinese government to cut taxes, carmakers’ plans for new model launches as well as the hopes that the U.S.-China trade spat will soon be resolved could start to turn things around, the executives said.
“We predict there will be negative growth in the first half this year, even double digit,” said Guangzhou Automobile Group Co Ltd’s (GAC) general manager Feng Xingya.
“But due to government subsidies, carmakers’ discounts and better macroeconomic conditions, sales will turn to positive in the second half,” he said.