Inicio Financial China’s auto industry rides high on demand rebound

China’s auto industry rides high on demand rebound

China's auto industry rides high on demand rebound

China’s car industry surged in March as demand recovered from weak levels in January, followed by a holiday-dampened February, propelling output higher.

Government and industry data released on Wednesday showed China’s vehicle sales rose by 9.9% year-on-year to 2.69 million units in March, rebounding from a 19.9% slump in February.

An intensifying price war, along with weekly model updates from major suppliers like BYD, Nio, Li, and makers of conventional cars, helped push sales higher, with new energy vehicle sales growing by 35.3% in March, rebounding from a 9.2% fall in February.

Total car sales in the three months to March reached 4.83 million units, up 13.1% from the same period in 2023, which was impacted by demand taking time to recover after the end of the harsh Covid lockdowns in 2022.

The revival in domestic auto consumption after the Chinese New Year holiday drove March sales, with retail sales of new-energy vehicles (NEVs) up 32% from March last year to 758,000 units, also up 92% from February.

China’s BEV sales in March were 566,000 units, up 15.5% year-on-year and 92.5% from February, while PHEV sales totalled 317,000 units, up 95.1% year-on-year and 73.2% from February.

Overall, NEV penetration reached 32.8% in March, up from 30.1% in February.

Tesla emerged as the second biggest seller of EVs last month, with 89,064 made-in-China units sold, just surpassing the 88,689 sold in March 2023, but marking a significant 47% increase from 60,365 EVs sold in February. China’s largest EV company, BYD, sold 301,631 units.