The Chinese Association of Automobile Manufacturers (CAAM) had expected no growth in the Chinese automobile segment. However, China's largest car industry association has changed its projections towards a drop in the market. CAAM revealed data showing a contraction for the twelfth month straight in June.
Sales in China dropped last year for the first time since 1990, with car sales falling by 2.8%. CAAM says that overall automobile sales this year have fallen 12.4% from this time last year. Sales in June alone fell by 9.6%. CAAM says that the government needs to take action to increase sales, saying that methods to this point had not been "as effective and strong as consumers had expected."
Despite all this, sales of NEV (new-energy vehicles) have risen. These cars are plug-in hybrids, battery-only electric cars, and hydrogen vehicles. China has been supported sales of these vehicles, with incentives to manufacturers. Last year, sales of NEVs rose 62%, despite the struggles of the automobile market as a whole. CAAM said that NEV sales rose sharply in June as well.
China is the largest market for automobiles. A fall in this market impacts nearly all global manufacturers, which have made a large investment in China. With this and other markets around the world suffering, economists say another recession is possible.