Auto sales in China experienced a setback in July, declining by 5% compared to the previous year, according to the China Passenger Car Association. Despite this, exports surged by about 20%, driven by electric vehicle manufacturers expanding into international markets. Around 2 million passenger cars were sold, with 1.6 million being domestic sales, showing a 10% year-on-year drop. The total exports of passenger vehicles increased by over 20% to 399,000 units. More than half of the vehicles sold were labeled as “new energy vehicles,” comprising electric and plug-in hybrids.
To stimulate demand, the government has enhanced incentives to encourage consumers to replace their older gas and diesel cars with electric vehicles. While the overall automobile sales market has been subdued, electric vehicle sales soared by almost 30% in July compared to the previous year, reaching approximately 991,000 units. Of these, 887,000 units were sold domestically in China, with 103,000 being exported.
Sales of foreign car manufacturers in China have either stagnated or decreased this year, highlighting fierce price competition in a saturated market. Chinese automakers have been rapidly increasing their market share, accounting for two-thirds of all vehicle sales in July as sales of their vehicles surged by 10%. The majority of vehicles sold in China from January to July were priced between 100,000 yuan to 150,000 yuan ($14,000-$20,500), with the highest proportion of EVs falling in the price range of 150,000 yuan to 200,000 yuan ($20,500-$28,000).
Although China’s Chery Automobile, SAIC, and Geely export more vehicles, primarily traditional fuel engine models, compared to EV manufacturers like BYD and Tesla, the latter are swiftly gaining traction in the market. In July, BYD exported 31,000 EVs and hybrids, while Tesla exported 28,000. From January to July, BYD exported 2.38 million EVs, surpassing Tesla’s 1.76 million exports.
The majority of China’s auto exports this year were directed towards Russia, with 478,000 Chinese-made vehicles being imported in the first half of the year, mainly conventional internal combustion engine vehicles. Mexico followed as the second-largest importer with 226,000 units, trailed by Brazil with 171,000 units.
