Last month was bad for nearly all automakers. Even those not involved in the failed merger between Fiat Chrysler and Renault-Nissan have been impacted by poor sales. According to Bloomberg, sales of light vehicles fell 7% globally in May, dragged down by a 16% decline in the Chinese market and stagnation in the U.S. and Europe. Research firm LMC Automotive said in a report, "The global automotive industry is enduring a sustained downturn not seen since the Great Recession.” That is sobering news.
The Chinese Market
For the past several years, most major automakers have focused on China. The declining growth of car sales in China is hitting hard. Some analysts have critiqued the decision of many carmakers to simply hold out hoping for stabilization. The Chinese market is big, but it's filling up. It is seeming unlikely that the growth predicting will happen on such a scale. In fact, the decline happening now is the first decline in the Chinese market in over 20 years.
Europe & US
A lack of demand in both Europe and the US is hurting automakers further. While not getting the return on their investment in China, companies are faced with a backlog of products not being sold in the European and American markets.
Hydrogen in China
Wan Gang, former Chinese science-and-technology minister and current vice chairman of China’s national advisory body for policy making, told Bloomberg, "“We should look into establishing a hydrogen society. We need to move further toward fuel cells.” Wan's role ranks higher than a minister and gives him large voice in the nation’s future planning. He said that the government will commit resources to the development of such vehicles. China, reportedly, plans to phase out its incentives for EVs in favor of hydrogen powered vehicles. Interestingly, Wan also said that he does not believe that we will ever have a fully autonomous car. However, these regulations in China could only be another hurdle for automakers to look ahead to, having already faced a hard month.