Visitors view a car from German carmaker BMW at Haikou New Energy Vehicle Exhibition in Haikou, south China's Hainan Province, Jan. 10, 2019. A total of 197 new energy vehicles were displayed at the exhibition. (Xinhua/Yang Guanyu)

Sales of new-energy vehicles (NEVs) in China declined 43.7 percent year-on-year in November, contracting for a fifth month in a row, data from the country's auto industry association showed on Tuesday. 

From January to November, the production of NEVs was 1.09 million, a year-on-year increase of 3.6 percent, the China Association of Automobile Manufacturers (CAAM) said on Tuesday. During the same period, sales totaled 1.04 million, up 1.2 percent year-on-year.

Meanwhile, the CAAM forecast a contraction for the whole year.

The sharp decline in November and the lower forecast mainly reflect a government decision to cut subsidies for green cars, which hampered consumers' purchases, said an analyst, noting that 2020 will be a difficult year - and a turning point for China's vast NEV market, the world's largest.

China is expected to remove subsidies for the NEV sector in 2020.

"Previously, the domestic NEV market was booming but chaotic as many low-end NEVs were tailored to qualify for subsidies instead of market demand, and that era was bound to end," Zeng Zhiling, an analyst at Shanghai-based consultancy LMC Automotive, told the Global Times.

The sector will be more market-driven as government subsidies end, Zeng said.

Moreover, the subsidies encouraged the front-loading of consumption, especially in less-developed areas - another cause of the sharp drop, Zeng said.

China's NEV sector expanded robustly over the past years, with sales surging to more than 1.26 million units in 2018 from less than 10,000 in 2009. NEV sales jumped almost 62 percent last year even as the broader auto market contracted.

"The government will shift its policy in the sector from 'stimulating' to 'regulating' next year," Zeng said.

Analysts said that despite the looming pain of a transition next year, NEV makers should be confident that government support for the sector is firm as always.

The Ministry of Industry and Information Technology released a draft plan for the domestic NEV industry on December 3, vowing to make pure electric cars a mainstream in the vehicle market. The ministry also set a target of having NEVs make up 20 percent of the country's total sales by 2025.

The market has also attracted foreign players like Tesla and Volkswagen, which increased their bets in the world's largest NEV over the past year

"They will further enrich customers' choices and increase competition for domestic players, that's how the market should be," Zeng said.

In November, total auto sales in China fell 3.6 percent year-on-year, a slight rebound from drops of 4 percent in October and 5.2 percent in September.