Dealers warn recovery in car market remains out of reach

The city’s car market remains under pressure, with dealers warning that a recovery is unlikely in the near term as prolonged vehicle replacement cycles and weak consumer confidence continue to weigh on sales.

According to official data, new motor vehicle registrations fell 15.2% year-on-year to 10,060 units in the first 11 months of last year.

Industry officials attribute the decline to economic uncertainty, changing consumer habits, and higher vehicle ownership costs, which have led residents to keep their cars longer than in previous years.

Cheng Wing Yiu, chairman of the Macau Motors Traders Association, said the city’s “golden decade” for car sales ran from 2004 to 2014, with the market peaking between 2010 and 2014.

“Back then, people typically replaced their cars every three to four years,” he said, as cited in a Macao Daily News report.

“Now, buyers are far more cautious, and there is no longer a clear replacement cycle.”

High maintenance costs, limited parking spaces and traffic congestion have dampened residents’ willingness to purchase new vehicles. Some households have even reduced the number of cars they own, further weakening demand.

Despite the overall slowdown, mainland Chinese car brands have gained significant ground in Macau.

Five years ago, their market share was close to zero, but it has since risen to more than 20%, surpassing European and American brands and trailing only Japanese marques.

Cheng noted that mainland new energy vehicle brands now offer a wide range of models, with prices spanning from around MOP100,000 to over MOP1 million. Most buyers currently opt for vehicles priced between MOP100,000 and MOP300,000.

Meanwhile the government’s renewed subsidy scheme for scrapping old diesel vehicles is expected to have a limited impact on the broader market.

Cheng said the policy mainly targets commercial users, offering subsidies of several tens of thousands of patacas.

However, replacing a vehicle still requires an additional investment of MOP200,000 to MOP300,000, leading many small and medium-sized enterprises to adopt a wait-and-see approach amid operating pressures.

Large-scale fleet replacement by integrated resorts has also largely run its course.

Meanwhile, Cheng said that the demand generated by the “Northbound Travel for Macau Vehicles” scheme has already been fully absorbed, and the city’s small market size continues to constrain growth potential.

Further, he added there are few drivers for large-scale replacement demand this year, with new taxi deployments likely to provide only marginal support.

“Overall sales are expected to match last year’s levels or fall slightly,” he said.