China’s NEV sales fell 4.7% in July to just 80,000 units after an 80% jump in June.

The world’s largest market for electric vehicles, China, saw sales of its “new energy vehicles,” or NEVs, fall 4.7% compared with year-ago results — the first drop in more than two years.

The China Associations of Automobile Manufacturers (CAAM) reported the results Monday as part of an overall decline of all vehicle sales in July of 4.3%. It was the 13thconsecutive months that overall automotive sales declined.

Sales of NEVs dropped to 80,000 vehicles last month, which runs counter to the 80% jump the month before. CAAM officials blamed the NEV sales drop in changes in government policies.

(Ford China 2.0: Automaker Kicks Off Second Act in China)

The overall market for vehicles fell 9.6% in June and saw a massive dip of 16.4% in May, the CAAM reported. The association predicted a drop of 5% for the full year, down to 26.7 million vehicles. Conversely, NEV sales were expected to rise to 1.5 million for 2019.

Not surprisingly, the ongoing sales slump has many automakers revising their sales and profit forecasts, including Geely and Great Wall. PSA Group and its local partner Dongfeng are looking to get ahead of the curve by closing two plants and laying off thousands of workers, Reuters reported.

Dongfeng Peugeot Citroen Automobiles (DPCA), the carmakers’ joint venture based in Wuhan, central China, will cut its workforce in half, down to 4,000 as it closes one plant and sells another under plans agreed last month between PSA boss Carlos Tavares and Dongfeng Chairman Zhu Yanfeng, Reuters reported.

Both carmakers declined to comment on details of their restructuring plans. “We are working with our partners to improve the overall performance of our business in China in all its dimensions,” a PSA spokesman told the news agency.

(Ford, GM Keep Taking Sales Hits in China; Q2 Sales Down)

Other automakers have been looking to revamp their strategies in the country in anticipation of a decline. In fact, Ford undertook a major overhaul of its efforts there, dubbing the new plan Ford China 2.0.

Ford is pinning its rebound on an influx of new product and an increased reliance on its Chinese partners. Ford China 2.0 comprises five key plans and four centers of competence to accelerate the redesign of its business and sharpen its focus on the Chinese market.

The five key plans focus on: accelerating product development and delivery, developing smart technology, deepening strategic partnerships, driving innovation and developing local talent. The four centers of competence are dedicated to: product, design, innovation and new energy vehicles, the automaker said when it debuted the plan in April.

In the meantime, China’s been dealing with a tough issue of its own: how to stem the tide of declining automotive sales and spur its overall economy while in the midst of an ongoing trade war with the United States? So far, its actions haven’t netted much, including the purposefully allowing the unfettered issuance of new licenses for gasoline- and diesel-powered vehicles in large cities.

(U.S. Treasury Names China a Currency Manipulator, Puts Trade Talks at Risk)

Additionally, the implementation of NEV emission standards earlier than the central government’s 2020 deadline by 15 cities and provinces, which account for more than 60% of car sales in China, frightened potential buyers hurting sales, according to CAAM.

Don't miss out!
Get Email Alerts
Receive the latest Automotive News in your Inbox!
Invalid email address
Send me emails
Give it a try. You can unsubscribe at any time.