China's automobile market has continued to catalyze the global auto recession, posting its worst sales month in history for May according to the China Association of Automobile Manufacturers (CAAM). The data showed a decline of 16.4% for May, following a decline of 14.6% in April and 5.2% in March. It was the sharpest decline ever for China's auto industry.
May's drop now marks an entire year of falling sales. The last time China saw retail auto sales rise was back in May 2018. And so, it is looking like a bloated and overextended global auto market will no longer be able to turn to China for reliable growth, as they have done since the 1990s. This has some automakers delaying expansion plans into China, while others execute global layoffs and restructurings. For example, we reported last month that there had been 38,000 layoffs across the industry over the last 6 months.
Global automakers have invested billions, betting that China would continue to grow, even in the face of pronounced slowdowns in Europe in North America. Looks like that may have been a mistake.
This just gives Trump more leverage in his response to the trade war China has been having with us.
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