What Is Up With The Automotive Industry In China?

[dropcap]I[/dropcap]n short, from 2020 China is leading the global automotive industry’s rebound from the COVID 19 pandemic.

Fact 1

In November, automotive industry sales went 4.5% up in China compared to 2020. Passenger vehicles went 7.1% up, and commercial vehicles went down by 5.3%.

Fact 2

2.52 million vehicles were sold in November 2021, a decrease of 9.1 percent compared with November 2020. The industry has experienced a decline in year-over-year sales each month for seven consecutive months (since April 2020), largely as a result of supply chain issues linked to chip supply constraints.

It is also likely that stimulus measures implemented in the post-COVID recovery period pulled demand into the latter part of 2020, making the year-over-year comparisons look relatively weak. This is especially true for commercial vehicle sales, which have been in double-digit negative decline since June.

Vehicle sales in China have been falling since 2017, but from 2020 China is leading the global automotive industry’s rebound from the COVID 19 pandemic.

It is fair to say that China has entered the cooling down period after a sharp post-covid rebound in automotive sales.

Fact 3

New Energy Vehicles sales continue to buck the otherwise negative overall market trend, recording a record month of 450,000 units sold. This represents a secular shift in market preference, recording a monthly share of 20.8%.

When looking at the individual performances, it remains clear that the NEV market in China is dominated by local brands, with only Tesla appearing in the top 10 list for November. Tesla is still the number one choice.

1. Tesla
2. Nio
3. Lixiang
4. Xpeng
5. WM

Local Chinese Smart EV brands XPENG (15,613 units), Lixiang (13,485), and NIO (10,878) all set new monthly sales records, while Tesla put up a solid month of sales (31,732 units including 23,117 Model Y).

3 top EV models sold in 2021:

1. Wuling Hongguang MINI EV
2. BYD Qin
3. Tesla Model 3

Fact 4

The secular shift towards electric vehicles is primarily benefiting the Chinese local brands. Local OEMs sell 4 out of every 5 electric cars sold in China, helping Chinese brands gain 5% of the total share of the Chinese automotive market.

And don’t forget that 3 out of 10 sold NEV car brands in China are owned by startup companies.

Impressive, right?

Source: CAAM (China Association of Automotive Manufacturers)