China’s April car sales swing to contraction despite NEV milestone

By Thomson Reuters May 10, 2024 | 3:45 AM

BEIJING (Reuters) – China’s car sales fell 5.8% in April from a year earlier, industry data showed on Friday, as a ferocious price war and incentives failed to shake off consumers’ caution about spending on big items during a shaky economic recovery.

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, sales of electric vehicles are still far slower than those of plug-in hybrids (PHEVs).

Sales of passenger vehicles were 1.55 million units in April, down 9.6% from March, the China Passenger Car Association (CPCA) said. Car sales had risen 5.7% in March on the year, and jumped 53% on the month.

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.

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.

China’s car exports, a major source of profit amid stiffer competition, jumped 38% to a new monthly record of 417,000 in April, slightly slower than the March rate of 39%.

($1=7.2241 Chinese yuan renminbi)

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