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China Auto Boom Continued In First Quarter Despite Friction Over Its Policies

China Auto Boom Continued In First Quarter Despite Friction Over Its Policies

New figures show China’s auto sales and production – especially those of EVs – expanded briskly in the first three months of 2024 amid rising tension with Western countries over policies to support the industry.

China’s auto sales rose by 10.6% to 6.72 million vehicles in the first quarter of this year, according to the China Association of Automobile Manufacturers.

In the first quarter, the country’s auto output increased 6.4% year on year to 6.6 million units, state-run Xinhua News Agency said in a report on association figures.

Production of new-energy vehicles, or NEVs, led the way, gaining 28% from a year earlier to 2.1 million units. NEV sales during the period rose by nearly 32% to 2.09 million units. China – already the world’s largest auto exporter – enjoyed a one-third rise in overseas shipments from a year earlier in the first quarter to 1.32 million units, the data showed.

Amid criticism in the U.S. and Europe that China’s industrial policies are creating excess EV capacity, Xinhua said in a commentary this week: “The allegation by the United States and Europe that China faces ‘overcapacity’ in its electric vehicle (EV) industry is groundless.” U.S. Treasury Secretary Janet Yellen in a visit to the country earlier this month called out artificially cheap Chinese goods.

China’s economy – the world’s second largest – has struggled to regain the pace of economic growth it routinely generated prior to the Covid pandemic. The number of billionaires in the mainland fell to 406 on the 2024 Forbes Billionaires List released this month, compared with 495 a year ago. Government support for supply chains compared with consumer spending has stirred worries of export subsidies in autos and green energy industries.

Although its membership declined, China’s clout in the auto world was on display in the new billionaires list. Half of the world’s 10 richest billionaires whose fortune comes from the auto industry were from the country. The five included CATV’s Robin Li, Geely Holdings Li Shufu, and Great Wall Motor Chairman Wei Jianjun. BYD had two founders in the top five: Wang Chuanfu and Lu Xiangyang.

Many global auto industry executives will have their eyes focused on China for a key annual auto show to be held in Beijing this year – Auto China. It starts on April 25.

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