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China car market close to annual contraction after Oct sales slide

Take a look under the bonnet .... And China's massive car market appears to be losing power... Sales were down nearly 12 per cent year on year in October.

Trade tensions one possible factor in the steepest fall in seven years ... Manufacturers rushing through sales in the months before to get ahead of those tensions, another .... SOUNDBITE (English) CITY INDEX MARKET ANALYST, KEN ODELUGA, SAYING: "There's certainly some inventory effects taking place, possibly to do with the action of trying to get ahead of tariffs which have already been imposed in one month and thereby causing another negative comparable effect in October." It's not just the technical, but the fundamental picture that worries China's top industry body.

Overall sales in the 10 months to October may still have been at just under 23 million cars .... But it sees the possibility of sales registering their first ANNUAL contraction since 1990.

This time it didn't mention it, but in previous months, it's singled out the trade war with the US as a cause.

SOUNDBITE (English) CITY INDEX MARKET ANALYST, KEN ODELUGA, SAYING: "The one remaining Sword of Damocles in this whole dispute is tariffs, all out tariffs on autos and maybe auto parts as well.

And then if that was imposed on what appears to be a sector which is already struggling, that should actually have a pretty damaging effect." Switch to battery and hybrid power - and the future looks not only cleaner, but more lucrative.

Sales in the NEV category remained strong in October - up over 75 per cent from the same period a year ago.




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