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Car sales reduction might have impact on chemical industry in China

2019/08/09 12:00

With automobile sales decreasing globally, market players are worried about the impact on the chemical industry. The automobile industry is an important “downstream” industry for the chemical industry. A downslide in automobile sales is regarded as a bearish factor in the petrochemical industry. Some market players forecast that profitability of the petrochemical industry would decline in 2019.

 

On the background of a global slowdown in the automobile industry, not only US-China trade friction intensified but also consumer sentiment became weak owing to political and economic reasons in Europe and other regions. The number of automobiles sold declined year on year in most countries in the data for June.

 

In Europe, registration of new passenger cars decreased by 7.8% year on year in June. The number of registrations declined by 3.1% in the first half of 2019. The European Automobile Manufacturers Association revised growth forecasts for new passenger car registrations downward from +1% to -1% in 2019. In the US, sales of new cars decreased by 2.8% year on year, the first decline since 2008.

 

In China, car sales dropped by 9.6% year on year in June. The downslide, however, improved from 16.4% in May because of sharp price reduction by automobile manufacturers. Since some cities in China introduced strict environmental regulations in line with the China VI standard, dealers were required to clear stocks for cars of the China V standard, which resulted in a rise in sales.

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