In June, China witnessed a 6.9% year-on-year decrease in car sales, marking the third consecutive month of decline as efforts by the government to boost consumer demand amid a sluggish economic rebound fell short.
Data from the China Passenger Car Association revealed that passenger vehicle sales in June totaled 1.78 million units, with the rate of decline accelerating from a 2.2% drop in May and a 5.8% fall in April.
Despite government incentives, including subsidies for car trade-ins introduced in April, a fierce price competition that had stimulated China’s vehicle sales earlier in the year has shown diminishing effects in recent months.
In the first half of the year, China’s overall car sales saw a modest increase of 2.9%, reaching 9.93 million vehicles. Notably, new energy vehicles, encompassing pure electric vehicles and plug-in hybrids, accounted for a record 48.1% share of domestic car sales in June.
Leading Chinese electric vehicle manufacturers like BYD, along with newer players such as Nio, Zeekr, and Leapmotor, reported record monthly sales. While the growth in electric vehicle sales slowed to 9.9% compared to 27.4% in May, sales of plug-in hybrids surged by 67.2%, up from a 61.1% increase in the previous month.
The country also saw a notable uptick in car exports, rising by 28% year-on-year after a 23% gain in May. However, concerns over the potential weakening of export trends arose following the European Commission’s confirmation of import tariffs of up to 37.6% on Chinese-manufactured electric vehicles.
Tesla, the U.S. electric vehicle manufacturer, exported 11,746 vehicles made in China in June, marking its lowest export volume since October 2022.
In a concerning sign reflecting subdued consumer demand, the vehicle inventory alert index compiled by the China Automobile Dealers Association surged by 8.3 percentage points year-on-year to a notable 62.3% in June.
