According to data from the China Passenger Car Association (CPCA), car exports rose 25% to 4.8 million vehicles, and despite additional tariffs on Chinese products, China will probably overtake Japan for the second consecutive year in 2024 to become the world’s largest export market. It will rank among the largest automobile exporters. Electric vehicles introduced by the European Union in late October.
According to the Japan Automobile Manufacturers Association, Japan’s automobile exports fell by 4.3% to 3.82 million units in the first 11 months of 2024.
However, CPCA Secretary-General Choi Dong-soo said export growth is expected to slow to 10% this year as shipments to Russia are expected to decline and tariff pressure in Europe will further increase, with EV exports expected to see “zero growth.” ” is expected to become.
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Exports of electric vehicles and plug-in hybrid vehicles, collectively known as new energy vehicles (NEVs), increased by 24.3% last year to 1.29 million units.
The association said a year-long subsidy review of Chinese-made EVs weighed on exports to the region, which grew by just 10% in the first few months, far short of the 36% increase expected in 2023.
According to the CPCA, the top three markets for Chinese cars in the first 11 months of 2024 were Russia, Mexico and the United Arab Emirates, while exports to Thailand, Australia and the United Kingdom declined.
Charles Lester, a research analyst at Law Motion, said that while EU tariffs will limit China’s EV sales in the short term, setting up production facilities in Europe, such as BYD in Hungary, will help in the long term. said it would help Chinese automakers gain market share in Europe.
local leader
In China’s domestic market, the world’s largest, sales of EVs and plug-in hybrids hit record highs amid fierce price competition, and subsidy trade-ins for more environmentally friendly vehicles boosted demand, leading to an increase in car sales in 2024. Sales maintained their growth pace.
China’s impressive growth at a time when the global EV market is largely stagnant bodes well for local leaders such as BYD, Geely and Xiaomi, prompting an industry shakeout in a competitive market.
This is also a tailwind for Tesla, with sales in China reaching a record high in 2024, countering a decline in overall global sales for US EV giant Tesla.
But other foreign automakers, including General Motors, Toyota and Volkswagen, continue to lose out to Chinese rivals, many of which struggle to maintain efficient production capacity in their Chinese factories.
According to CPCA data, passenger car sales in 2024 will increase by 5.3% to 23.1 million units, marking the fourth consecutive year of growth and matching the pace of 2023.
Boosted by a program likened to the 2009 U.S. “cramp economy” stimulus package, NEV sales rose 40.7% last year, accounting for 47.2% of total car sales and nearing the 50-unit milestone.
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More than 6.6 million cars sold last year benefited from government subsidies of up to $2,800 for NEV purchases and up to $2,000 for more fuel-efficient internal combustion engine vehicles. According to official data, more than 60% of the subsidy purchases went to NEVs.
The Chinese government announced on Wednesday that it would extend car trade-in subsidies until 2025 as part of an expansion of the consumer trade-in system to restore economic growth.
“We expect the auto trade-in subsidy program to increase demand by 3 million units in 2025,” said Bin Wang, an analyst at Deutsche Bank.
Overall, car sales are estimated to increase by 2% this year, with NEV sales increasing by 20% and accounting for 57% of China’s total car sales, CPCA predicted.
This means EV and plug-in hybrid vehicle sales growth in 2025 will be the slowest since 2021, even though Choi expects the scale of government subsidies to remain at this year’s peak levels. suggests that it is possible.
Despite sales growth, China’s automobile industry has seen declining profitability in recent years. The association said its return on sales for the first 11 months of 2024 was 4.4%. In contrast, it will be 5% in 2023 and 6.2% in 2020.
Suppliers and dealers have also suffered from prolonged price competition, forcing them to further reduce component prices or offer deep discounts.
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First edition publication date: January 11, 2025, 9:43 AM IST
