The auto market in China had a weak start to the year, falling 15.1% yoy. Automakers have offered price cuts and rebates to lure customers. However, sales of alternatively powered vehicles (NEVs) rose by about 24% – and China surpassed Germany in February in terms of car exports.
Auto market in China with a weak start to the year
At the beginning of the year, the Chinese car market continued to be in weak shape. Significantly fewer cars were sold in the first two months than in the previous year, even though the car market has recovered significantly compared to January. However, it still falls short of general expectations. Auto dealers are reporting a wait-and-see attitude from customers as many of them pay off their consumer loans and mortgages. That is why numerous manufacturers have implemented price reductions, discounts and promotions.
According to the China Association of Automobile Manufacturers (CAAM), a total of 1.97 million cars, including 1.65 million passenger cars, were sold in China in February of this year. In the first two months of 2023, sales totaled 3.62 million cars, down 15.1% compared to last year, when 4.26 million cars found new owners in the same period.
The China Vehicle Inventory Alert fell 3.7% from the previous month to 58.1%. Compared to the previous year, however, it increased by 2.0%. A reading above 50% indicates increasing selling pressure on the dealerships, usually reflected in discounts and other sales promotions.
Share of alternatives increases to over 26%
The proportion of vehicles with alternative drives increased to 26.6%. Last year their share was 24.3%. Sales of alternatively powered vehicles (NEV) in China are developing positively. In February 2023, a total of 525,000 NEVs were sold, of which 352,000 were BEVs and 149,000 were PHEVs. A total of 393,000 NEVs were sold in January, of which 272,000 were BEVs and 12,100 were PHEVs. Cumulative sales of NEVs in January and February 2023 totaled 918,000 compared to 740,000 in 2022, an increase of approximately 24%.
China overtakes Germany in auto exports
A total of 329,000 units were exported in February, including 58,000 commercial vehicles, of which Tesla alone accounted for 40,479 units. Germany exported a total of 227,400 cars in February, meaning that China overtook Germany in terms of car exports this month.
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