Domestic car sales within China has slipped by 5.8% in April 2024 from the same time last year.
While the recent Auto China 2024 held in Beijing certainly projected the might of the current Chinese auto industry, the statistics behind the scene though did not really paint all that rosy a picture of the current market condition. Such is as the China Passenger Car Association (CPCA) had since detailed for domestic auto sales in China to have slipped by 5.8% in April from the same time a year earlier, with the 1.55 million units registered that month being a steep 9.6% drop from the prior month of March too.
Now before even thinking that the Chinese auto industry is currently going the way of its property sector however, it is nevertheless worth highlighting that this slump in domestic car sales comes after a year-on-year rise of 5.7% reported back in March. The CPCA has further detailed that car exports from China in April were at a record high in April, with the 417,000 cars shipped out internationally being 38% more than what was charted during the same time last year.
That said though, this recent slip in domestic sales could potentially underline the beginning of this slow downward slide towards a more reasonable level, in place of this consistent roaring growth. And this hypothesis is to be backed up somewhat by the reasons that have precipitated this April sales slump in the first place, which includes the intensifying price competition and consumer’s caution about spending on big items during a shaky economic recovery.
The protracted price war involving over 40 brands has already been raging for the better part of six-months already, with the result being that even industry heavyweights like BYD and Tesla are currently offering their best-selling models with no down payment offers. To further woo cautious consumers too into buying new cars, the Chinese government has quietly rolled out subsidies of up to 10,000 rmb (RM 6,500) for trade-ins.
Though even that really is not enough for some to keep their factory lights on, with foreign automakers in particular currently the one’s feeling the pinch the most. Mitsubishi for instance has since already pulled out of the Chinese market amid slowing sales, while Honda has more recently announced too that 14% of the workforce (approximately 1,700 employees) for its joint venture with GAC have agreed to a voluntary layoff.
Chinese automakers themselves meanwhile are currently looking outside of China to find their lifeline for continued survival, amid the intensifying local competition. An ongoing anti-subsidy investigation by the EU into Chinese automakers has disrupted and put pressure on vehicle exports to the bloc, but this has in turn saw many switch to actively exploring potential export markets in South America and the Asian-Pacific region instead.
Such is the reason therefore for the current influx in Chinese marques finding their way to Malaysia, with BAIC, Leapmotor and Jetour among the latest to join a growing list that includes MG, GWM, Chery, Jaecoo, smart, GAC and BYD. And if whispers on the grapevine are to be believed too, there could very well be two or three more to join that already long list by the end of this year…
