Car Market: Can China's passenger car market rebound?

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Last year, China's auto market suffered its first painful negative growth in many years. So far this year, the growth pace is still slowing down. Has the market peaked? Can it bounce back? CGTN reporter Ge Yunfei tries to find out.

For the last eight years, China has held the title of the world's largest auto market. Over the same period, passenger car sales doubled to 24 million units, with a compound growth rate of 7%. But in 2018, it shrank for the first time in more than two decades. Experts say the decline is mainly due to the consuming power unleashed in advance.

JOHN ZENG, MANAGING DIRECTOR LMC AUTOMOTIVE SHANGHAI "The biggest factor is the incentive policy starting from September 2015. We believe the inventive policy actually put forward four to five million car sales during these two years."

And China's efforts to protect its environment surprisingly backfired on its car market.

GE YUNFEI CHANGSHA "With the new State VI standard, China will overtake the European Union to implement the world's toughest automobile emissions controls. But that also will bring many challenges, and even some chaos."

Zeng says some provinces and cities are implementing the State VI Emission Standard ahead of schedule. That makes many consumers reluctant to purchase State V cars which are still mainstream. But even in this downward market, someone on the automobile supply chain is still making more profit.

FERNANDO TEIXEIRA VAMA CEO "In 2019 the trend is going down. But since January, our company is making profit, even better than last year."

Teixeira is the CEO of a joint-venture car steel company founded by the world's largest steelmaker, ArcelorMittal. As China's new emissions standards call for car manufacturers to upgrade their products, using lighter but stronger steel can help.

FERNANDO TEIXEIRA VAMA CEO "The solutions we provide to the market matches very well with the regulation. That means increasing consumption for this new steel will bring more business to VAMA."

According to LMC Automotive, though the growth of China's passenger car market will be flat, it will rise again in 2020. And by 2025, around 31 million passenger cars will be sold in China, increasing by 7 million from 2018.

JOHN ZENG, MANAGING DIRECTOR LMC AUTOMOTIVE SHANGHAI "The fundamental reason behind that is we still see a very low vehicle density today in China. So that's why we still believe China still has room to grow."

And according to LMC, by 2025, the sales of new energy vehicles will nearly triple to 2 million units in China. Ge Yunfei, CGTN, Changsha.