Growth in sales of China’s passenger vehicles was flat in March from a year earlier, industry data showed on Monday, even as auto brands cut prices and local governments rolled out incentives to support demand.
Car sales in March were 1.61 million units, the China Passenger Car Association (CPCA) said. In the first three months, sales fell by over 13% to 4.33 million units, it added.
Sales of new energy vehicles (NEVs), which include pure battery electric cars and plug-in hybrids, rose nearly 22% in March and accounted for 34% of the month’s sales, the data showed.
BYD led the segment with market share of 35.5%, while Tesla accounted for 14%.
But there was no doubt that April would see a good recovery in sales growth, Cui Dongshu, the association’s secretary general, told reporters.
Dongshu cited a low base in the corresponding period last year when China imposed strict Covid-19 lockdowns in major cities, such as its commercial hub of Shanghai, in April 2022.
Price war on fuel cars
Prices of NEVs have been falling fast in China, thanks to major price discounts and tumbling battery costs. That has stepped up pressure on internal combustion engine (ICE) vehicles and the legacy brands behind them.
More than 40 brands have joined a price war started by Tesla this year, including Nissan, Toyota and Volkswagen.
The carmakers are offering aggressive discounts on their best-selling ICE models to defend market share.
Local authorities, who see the auto industry as a pillar of the economy, have also been rolling out buyer subsidies to drive demand. Some of these programmes have also started to extend to automakers, to spur manufacturing.
- Reuters, with additional editing by Vishakha Saxena