Why car sales have dropped and why that might be a good thing
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Why car sales have dropped and why that might be a good thing

CAR sales in China dropped for the first time in almost thirty years in 2018, ending the consistent run of growth that many local and international manufacturers had come to rely on from the world’s largest car market.

The six percent drop in sales spells trouble for many manufacturers who have been banking on China to make up the shortfalls brought on by oversaturation and declining car sales elsewhere in the world.

This isn’t just a China problem, but a global trend.

Europe recorded an 8.7 percent drop in December. US automaker Ford reported an 8.8 percent drop in sales for December, with declines in passenger cars, SUVs and pickup trucks; and in the UK, new vehicle sales in 2018 fell by their biggest rate since the global financial crisis a decade ago. The Australian car market recorded its first sales decline since 2014 with a three percent drop over the prior year, ending ten continuous months of slowing sales.

SEE ALSO: Why the Chinese have stopped spending

In China, the slowdown in sales is predominantly attributed to a general economic slowdown, rising unemployment, mounting household debt and less consumer confidence. Add to this the ongoing China-US trade war and people are more reluctant to spend during these uncertain times.

Government subsidies for car buying also ended last year reducing consumer incentives to buy new cars.

Understandably this has many in the car manufacturing industry, and industry in general, worried for the future but from an environmental stand point, it’s considered a win.

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A man drives his electric car on a street in Beijing on November 30, 2018. Source: Nicolas Asfouri/AFP

With the Intergovernmental Panel on Climate Change warning the 1.5-degree temperature rise threshold will likely be broken in just 12 years, any reduction in carbon emissions is a welcome development for climate scientists.

An average three-litre engine car can produce around 4.5 tonnes of carbon dioxide a year. Even smaller 1.5-litre engines billow out around two tonnes. By giving up a car, an individual can save 2.4 tonnes of carbon dioxide from entering the atmosphere on average.

Not only is it good for the environment but also beneficial to everyone’s health.

The dangerous cocktail of chemicals in exhaust fumes can cause a whole raft of health issues, including birth defectslow birth weight, cardiovascular disease, and can even damage children’s mental health.

SEE ALSO: World economy braces for global trade slowdown in 2019

While the overall car sales dropped in China last year, electric-car sales sky-rocketed, increasing 62 percent to 1.26 million units sold. This was helped along by a government push to move to electric which could mean 2017 will remain the peak year for gasoline-powered cars.

While the shift away from petrol-power is welcome, some cities are hoping to do away with cars entirely. As Stephen Moss for The Guardian puts it, cities are “outgrowing the automobile.”

Despite the world’s reliance on cars, it is one of the least efficient objects many people will ever own. It essentially sits outside, idle and depreciating, for 96 percent of its life.

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Tesla boss Elon Musk (L) walks with Shanghai Mayor Ying Yong during the ground-breaking ceremony for a Tesla factory in Shanghai on January 7, 2019. Source: STR/AFP

Urban planners appreciate there must be a more resourceful way to tackle transport, and they are working on finding a solution.

As Moss points out, “Multi-modal” and “interconnectivity” are now the words on every urban planner’s lips.

Cities of all sizes are reorienting their transportation priorities toward people over cars.

Expanding road systems to be accessible to all – including pedestrians and cyclists – reflects a turn away from automobility as the only choice for urban travel. Local transportation officials and planners now place a larger focus on offering many modes of travel and consider quality-of-life rather than simply encouraging driving everywhere.

Planners picture a future in which no city-dweller will need a car. Bikes and more efficient public transport would be the norm; for occasional trips out of the city, people could hire a car or join a car club that facilitated inter-city travel.

With this vision of a car-free future, the downward trend in global car sales only looks set to continue. While it may recover slightly in the short-term, as cars become a dying breed, a severe decline is inevitable in the long run. In such an instance, automakers won’t be able to look to China in the hopes of reviving sales, and may instead need to consider a career change.

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