Why China’s Auto Market Surges by 14% Despite Economic Slowdown?
By DSong
In October 2023, sales of new vehicles in China’s Auto Market witnessed a 14 percent surge, reaching 2.853 million units. But the question is how it gave this promising growth when the economy is slowing down.
As per the China Association of Automobile Manufacturers (CAAM) data, this was a significant increase from 2.505 million units a year ago, msn reported.
Despite ongoing efforts to stimulate the economy after the Covid pandemic, China’s recovery has been gradual, with a 5.2 percent GDP expansion in the first nine months of the year, following a 3 percent growth rate in 2022. Manufacturing and exports continue to face challenges, and the property sector is grappling with recovery obstacles resulting from significant bankruptcies.
Possible Reasons for Surge
Several factors can be attributed to the spike in China’s Auto Market amid a slowing economy. Despite overall economic challenges, specific elements within the automotive industry have driven growth. Notable contributors include the introduction of new energy vehicles (NEVs), robust sales growth due to aggressive marketing campaigns and discounts by manufacturers, and sustained consumer interest in innovative automotive technologies. These factors have collectively outweighed the broader economic slowdown, showcasing the resilience and adaptability of the automotive sector in the Chinese market.
Commercial Vehicles Sales Up by a Fifth, Exports 58%
Over the initial ten months of the year, the overall vehicle market expanded by nearly 9 percent, totaling 23.97 million units compared to 21.98 million during the same period in the previous year.
Notably, the sales of commercial vehicle sales saw a substantial 20 percent rise, reaching 3.31 million units. Whereas, passenger vehicle sales experienced a 7.5 percent increase, reaching 20.66 million units.
Chinese brands have notably augmented their collective share of the country’s passenger vehicle market, estimated at 56 percent year-to-date. This increase is largely attributed to the rising popularity of electric and plug-in hybrid vehicles, locally known as new energy vehicles (NEVs). NEV sales demonstrated a notable 38 percent increase year-to-date, totaling 7.3 million units and constituting over 30 percent of the total vehicle sales in the country.
During the ten-month period, vehicle production in China increased by 8 percent to 24.02 million units, while exports experienced a remarkable surge of 58 percent, reaching 3.88 million units, including 949,000 NEVs.
