Last Month's Turnaround in China Auto Sales Growth... Strong Performance of 'New Energy Vehicles'

China's automobile sales have returned to growth, supported by local government assistance and price reductions by manufacturers.

Traffic congestion on the 2nd Ring Road in Beijing, China / Photo by Yonhap News

According to the China Association of Automobile Manufacturers on the 10th, automobile production in February reached 2.032 million units, a 27.5% increase from the previous month. Sales totaled 1.976 million units, up 19.8%. Compared to the same period last year, production and sales increased by 11.9% and 13.5%, respectively.

Traditional internal combustion engine passenger cars sold 964,000 units, a 6.6% increase from the previous month but a 9.8% decrease compared to the same month last year. On the other hand, new energy vehicles (electric vehicles, hybrid vehicles, hydrogen vehicles) sales surged 55.9% year-on-year to 525,000 units. Their market share also rose to 26.6%.

BYD, the global leader in the electric vehicle market, maintained first place with sales of 193,000 units, while Tesla recorded 74,000 units, ranking second. Passenger car sales reached 1.653 million units, up 12.5% from the previous month, and commercial vehicle sales surged 79.4% to 324,000 units, significantly outpacing the growth rate of passenger car sales. The association attributed this to the easing of pandemic controls and the stabilization of COVID-19 spread, which gradually restored economic activity.

Earlier, in January, automobile production and sales sharply declined by 33.1% and 33.5%, respectively, compared to December of last year. This was largely due to the end of the central government's purchase subsidies for new energy vehicles, which had been in place since 2017, and the temporary vehicle purchase tax reduction that was implemented from last June and ended at the end of last year.

In response, automobile manufacturers including Tesla rapidly lowered prices, and local governments launched initiatives such as purchase subsidies and discount coupons to revive the automobile industry.

Meanwhile, China's automobile exports in February reached 329,000 units, increasing 9.4% and 82.2% compared to the previous month and the same period last year, respectively. The cumulative exports for January and February also rose 52.9% year-on-year to 630,000 units, maintaining a strong trend. Notably, new energy vehicles led exports with a 62.8% year-on-year surge to 170,000 units.