Shanghai (ZXZC)- China’s auto sales has declined for four consecutive months from July to October and 2018 is expected to see the first annual drop after nearly 20 years’ growth. Many industry analysts thought winter for the industry has come and this year will be a transition year for China industry.

The rapid development of auto industry has been slowed by numerous demanding challenges, including China-US trade war, and the whole industry should be fully prepared to overcome them, Fu Yuwu, president of the Society of Automotive Engineers of China, said at the 6th Symposium on Automotive and Environment 2018 held by ZXZC.

The association president disagrees that 300 million is the ceiling for annual sales. There is no doubt that China’s auto industry has great development opportunities in the medium and long run. Big challenges should not be cited as reasons for lacking confidence. According to Mr. Fu, the decline is periodic or short-term and can’t be counted as an inflection point for the industry. It’s just the transition from fast growth to high-quality development.

Xu Zheng, director at SAIC Motor, said at the symposium that just as China’s economy has entered into high-quality development phase, our country’s auto industry has stepped into the transition period to pursue high-quality development after multi-year high growth only in sales. To take the long view, slower and fluctuant growth will be normal. Market competition, in Mr. Xu’s opinion, will give more play to the mechanism of survival of the fittest to promote the upgrading of the industry.

Shi Jianhua, deputy secretary-general of the China Association of Automobile Manufacturers, attributed the negative growth to such factors as the overdraft of demand because of the preferential policy in cutting purchasing tax in the past couple years.

If the annual sales this year can reach 290 million, the average annual growth rate of the four years from 2015-2018 will be 5.4% while the range between 3% and 5% is normal. Mr. Shi estimates that China’s auto sales in 2019 may remain flat or increase slightly compared with this year. So this year’s sales decline will be a transition from rapid development to stable and high-quality development. The slower growth rate can make the auto industry think rationally to improve the product competitiveness for future development.

Xu Changming, deputy director of the State Information Center, also thought the industry will be faced with difficulties in short term but he feels optimistic for the long-term development. In spite of the sales decline, Mr. Xu hasn’t changed its estimation that the annual sales peak will be 420 million. He said the target remains the same but it will be later to reach this peak, maybe 15 years later instead of 10 years.