LDN - Business

China's car exports hit record high in April, as domestic sales fall

[May 10, 2024] By Qiaoyi Li and Brenda Goh

BEIJING (Reuters) -China's car exports surged to a record high in April, data showed on Friday, as domestic sales slipped 5.8% from a year earlier amid intensifying price competition and consumers' caution about spending on big items during a shaky economic recovery.

Car exports jumped 38% year-on-year to 417,000 units in April, continuing strong momentum from the previous month which posted a 39% growth in exports, the China Passenger Car Association (CPCA) said.

An ongoing anti-subsidy investigation by the EU into Chinese automakers has disrupted and put pressure on vehicle exports to the bloc, but China has been actively exploring South America, Australia and ASEAN markets for exports, said Cui Dongshu, secretary general of the association.

He said local automakers would have to make a choice between going overseas and losing out, as competition in the domestic market intensifies.

Passenger vehicle sales in the world's biggest auto market fell 5.8% in April from a year earlier to 1.55 million units and slipped 9.6% from March, CPCA data showed. Car sales had risen 5.7% in March on the year, and jumped 53% on the month.

"Market sluggishness was worse than expected, while some automakers still strived to keep producing and resulted in rising inventories at dealerships," Cui said.

While the share of new energy vehicle sales scaled a new high, paving the way for the world's largest auto market to fast-track its green goal, EV sales are still far slower than those of plug-in hybrids (PHEVs).

NEVs accounted for 43.5% of total car sales, a record full-month high after hitting a milestone of more than half in the first half of April. China has set a target of 45% by 2027.

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Cars to be exported sit at a terminal in the port of Yantai, Shandong province, China January 10, 2024. China Daily via REUTERS/File Photo

EV sales quickened to 12.1% in April from 10.5% in March, while PHEV sales jumped 64.2% against a rise of 75.4% in March.EV sales had contracted 6.3% from March while PHEV sales dropped 4.7%.

The PHEV segment, which has grown faster since 2022, drives the success of domestic giant BYD, making up 57% of the company's car sales in April.

China's share of the global PHEV market rose to nearly 70% in the first quarter, Association data showed.

Japanese automakers who have pioneered hybrid technologies lagged behind, capturing just 1.9% of the global PHEV market in the first quarter.

Mediocre EV sales versus growing bets on an all-electric future underscore slowing demand in China despite a protracted price war that has drawn in more than 40 brands.

To woo cautious consumers, China has announced subsidies of up to 10,000 yuan ($1,380) each for auto trade-ins and more automakers, including Tesla and BYD, have started offering best-selling models with no down payments.

($1=7.2241 Chinese yuan renminbi)

(Reporting by Qiaoyi Li and Brenda Goh; Editing by Mark Potter, Clarence Fernandez, Elaine Hardcastle)

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