What’s new: China has reported its first month-on-month decline in vehicle sales since July, despite renewed efforts by some carmakers to offer discounts in the world’s largest auto market.
The country’s passenger car retail sales in January reached 2.04 million vehicles, down 13.9% from December, according to data published by the China Passenger Car Association (CPCA) Thursday.
The drop was due to carmakers’ year-end promotions enticing people to place orders in December, an uptick in prices of certain car models and a reduction in local government-backed consumption stimulation schemes like voucher handouts, the CPCA said in a report accompanying the data.
Retail sales of passenger NEVs, or new-energy vehicles, fell 29.5% month-on-month to 668,000, also the first such drop since July, according to the CPCA’s data. NEVs mainly consist of electric and hybrid models.
Despite the month-on-month decline, China’s January passenger car retail sales jumped 57.4% year-on-year, with the figure for passenger NEVs more than doubling from the same month of 2023, according to the CPCA, attributing the growth to a low base of comparison last year, when the weeklong Lunar New Year holiday fell in January.
The background: In January, some automakers including Tesla Inc. again lowered prices in China, sparking concerns of another round of discounts that marked an industrywide price war in the country about a year ago.
A price war among manufacturers of both electric and conventional vehicles will remain fierce in China this year as NEV-makers have the potential to reduce prices amid a drop in the cost of lithium carbonate, a key raw material in EV batteries, the CPCA predicted.
Contact reporter Ding Yi (yiding@caixin.com) and editor Kelsey Cheng (kelseycheng@caixin.com)
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