The automotive industry in China had low Sales in July and August, 5%, and in September, 2%. This trend has compelled the local manufacturers and their foreign joint venture partners, according to the China Association of Automobile Manufacturers (CAAM). Nevertheless, on an accumulative basis, on the vehicle scale of the first nine months of 2024, a slight growth of 2.09% was demonstrated at 21,571 thousand units, with a 27% growth in exports. Nonetheless, domestic sales fell by 5%.
The Chinese government, realizing that gross BC declined from 5.3% Q1 to 4.7% Q2, with consumer spending being especially slow, has redoubled its attempts to push the market. These include increasing EV customers' outlay from CNY 10,000 to CNY 20,000 and regional and central bank measures to lower vehicle loan structures.
Another factor was observed to be at the level of manufacturers, where performance differences were noted. A company that Dayang owned had a 32% increase in global sales, led by BYD Auto (BYDDY, Financial), which benefited from an early strategic shift into New Energy Vehicles (NEVs), including battery electric vehicles (BEVs) and hybrid electric vehicles (PHEVs). While GAC faced a 26% sales decrease due to global business development, Geely (GELYF, Financial) and Great Wall auto (GWLLF, Financial) manufacturers also expanded in global markets.
Increased competition, especially in new-energy vehicles represented by BEVs, in recent years has led to volume selling and the proliferation of commoditized models, which have significantly cut margins and earnings, leading to companies seeking markets abroad. This strategic shift is the outcome of the industry's adaptation to the changing market conditions and the efforts to get access to the international market within the existing internal problems.
