What’s new: China’s auto market started 2023 with a sales plunge of nearly 45% as the end of government subsidies and the week-long Lunar New Year holiday dragged on sales.
From Jan. 1 to 27, retail auto sales totaled 985,000 units, down 45% from a year ago and 43% less than a month earlier, according to the China Passenger Car Association (CPCA). Sales to dealers slumped 50% year-on-year to 891,000 vehicles during the period.
Sales of new-energy vehicles (NEVs) declined 1% year-on-year to 304,000 units, down 43% from December.
The context: China terminated state subsidies for NEVs and tax cuts for low-emission gasoline cars in December, prompting a rush of purchases at the end of last year and sapping demand in in the new year, analysts said.
China’s retail sales of NEVs jumped 90% to 5.67 million in 2022, CPCA data showed.
Leading electric-car makers including BYD and Nio Inc. reported weakened sales in January, plunging between 30% and 80% from the previous month.
Nio CEO Li Bin said earlier that NEV market demand would remain weak during the first half of 2023 with a recovery expected to start in May.
The CPCA said in a report that the end of the state subsidies and price rises by some automakers affected sales in January. Meanwhile, the recent price cuts of Tesla Inc. in China also fueled a wait-and-see attitude among consumers.
Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bob.simison@caixin.com)
Get our weekly free Must-Read newsletter.
