China’s auto imports plunge 87% in Jun ahead of tariff cuts

SHANGHAI, Aug 8 (SMM) – China's automobile imports tumbled 87.1% from a year earlier to 15,000 units in June, according to data from the China Automobile Dealers Association (CADA). Wang Cun, director of the imported cars committee at CADA, described such a decline as “historically rare”.

In January-June, China's imports fell 22.1% on the year and stood at 452,000 automobiles.

Sales of imported vehicles also declined, down 21.2% from a year ago to 63,000 units in June. Overall sales of imported cars fell 9.8% to 394,000 units during January-June.

Tariff cuts, effective from July 1, accounted for the decline in import volumes and sales, SMM believes.

Import tariffs for foreign-made automobiles and car parts were cut from 25% to 15%, from July 1. Potential consumers held back in June and many car dealers held back their import orders and decided not to import until July 1.

As trade tension with Washington grew, China in June raised tariffs on cars from the US to 40%, effective from July 6.

The slump in sales of imported vehicles in June is likely to have little impact on the Chinese auto market as imported cars account for just 5% of China’s market for new cars, SMM expects.

The China Association of Automobile Manufacturers (CAAM) said that overall sales during the first half of 2018 rose 5.6% from the same period last year to stand at 14.07 million vehicles. For the same period, output of cars in China rose 4.2% from a year earlier to 14.06 million vehicles. Year-on-year growth in sales and output grew 0.83 percentage point and 0.49 percentage point faster than in the first half of 2017, respectively.

Production in the automobile industry has been in a seasonal lull since June. This lowered the demand for hot-rolled, cold-rolled steel products and weighed on prices.