Auto sales in China experienced a setback in July, with a 5% decline from the previous year, according to the China Passenger Car Association. Despite this drop, exports saw a significant increase of about 20%, driven by the expansion of electric vehicle makers into global markets.
The total sales of passenger cars in July amounted to approximately 2 million units, with 1.6 million sold within China, marking a 10% decrease compared to the previous year. However, exports of passenger vehicles surged by over 20% to 399,000 units, indicating a strong demand for Chinese-made vehicles in international markets.
Notably, more than half of the vehicles sold were classified as „new energy vehicles,“ which include electric and plug-in hybrid cars. This trend reflects the growing emphasis on sustainability and clean energy in the automotive industry.
Chinese automakers have been increasing their exports as domestic demand wanes, partly due to tariffs imposed by the U.S. and the European Union. These tariffs are based on the argument that government subsidies provided by China give its automakers an unfair advantage in the global market.
In response to these trade disputes, China’s Commerce Ministry has taken action by submitting the provisional tariffs to the World Trade Organization for dispute settlement. The ministry criticized the EU’s ruling, stating that it violates WTO rules and undermines global cooperation in addressing climate change.
To stimulate demand and combat economic slowdown, China has introduced incentives to encourage consumers to switch from traditional gas and diesel vehicles to electric ones. This initiative aims to promote cleaner transportation while supporting the growth of the EV market.
Despite the overall sluggishness in car sales, the sales of EVs saw a significant increase of nearly 30% in July, reaching approximately 991,000 units. Chinese automakers have been dominating the market, accounting for two-thirds of all vehicle sales in July, with a 10% rise in sales compared to the previous year.
The majority of vehicles sold in China were priced between 100,000 yuan to 150,000 yuan, with EVs priced between 150,000 yuan to 200,000 yuan being the most popular. Chinese automakers like Chery Automobile, SAIC Motor, and Geely Auto Group continue to lead in exports, although EV makers such as BYD and Tesla are rapidly gaining traction in the market.
BYD exported 31,000 EVs and hybrids in July, while Tesla exported 28,000 units. In the first seven months of the year, BYD exported 2.38 million EVs, surpassing Tesla’s 1.76 million units. The majority of China’s auto exports were directed to Russia, with 478,000 vehicles imported in the first half of the year, followed by Mexico and Brazil.
Overall, the dynamics of the auto industry in China reflect a shifting landscape influenced by global trade tensions, environmental concerns, and the rise of electric vehicles. As Chinese automakers continue to expand their presence in international markets, the competition in the industry is expected to intensify, driving innovation and growth in the EV sector.