CPCA data indicates a 25% surge in Chinese car exports, totaling 4.8 million units. This establishes China's global leadership in auto exports, exceeding Japan's figures for the second consecutive year, even with the EU's recently implemented tariffs on Chinese electric vehicles.
In contrast, Japan's auto exports declined by 4.3%, totaling 3.82 million vehicles during the first eleven months of 2024, as reported by the Japan Automobile Manufacturers Association.
However, export growth is expected to decelerate to 10% this year, with a decline in shipments to Russia compounding the tariff challenges in Europe, according to Cui Dongshu, secretary general of CPCA. Furthermore, electric vehicle exports are anticipated to experience "zero growth."
Last year, exports of electric cars and plug-in hybrids, collectively referred to as new energy vehicles (NEVs), increased by 24.3%, reaching 1.29 million units. A year-long investigation into subsidies for Chinese-made EVs has negatively impacted exports to the European bloc, with initial growth of 10% in the early months falling significantly short of the 36% increase seen in 2023.
The top three markets for Chinese-made vehicles during the first eleven months of 2024 were Russia, Mexico, and the United Arab Emirates, according to CPCA, while exports to Thailand, Australia, and the United Kingdom saw declines.
Although EU tariffs may restrict sales of Chinese electric vehicles in the short term, the establishment of production facilities in Europe, such as BYD's in Hungary, is expected to enable Chinese automakers to capture a larger market share in the long run, as noted by Charles Lester, a research analyst at Rho Motion.
The stacked bar illustrates the sales of new energy vehicles alongside the sales of other types of fuel-powered cars in China.
LOCAL LEADERS
In 2024, car sales in China's vast domestic market continued to grow, with electric vehicle (EV) and plug-in hybrid sales reaching unprecedented levels. This surge occurred amidst an intense price competition and the implementation of subsidized trade-ins for environmentally friendly vehicles, which significantly boosted demand.
The remarkable expansion in China, contrasting with a largely stagnant global EV market, is promising for local companies like BYD, Geely, and Xiaomi, and has accelerated a consolidation phase within this competitive sector.
Tesla also reaped benefits, achieving record sales in China for 2024, despite an overall downturn in the U.S. automaker's global sales figures.
Conversely, foreign manufacturers such as General Motors, Toyota, and Volkswagen continued to cede market share to their Chinese counterparts, with many facing challenges in maintaining optimal production levels at their facilities in China.
According to data from the China Passenger Car Association (CPCA), passenger vehicle sales increased by 5.3% to 23.1 million units in 2024, marking the fourth consecutive year of growth and aligning with the previous year's trend.
Sales of new energy vehicles (NEVs) surged by 40.7%, accounting for 47.2% of total car sales last year, approaching the significant 50% threshold. This growth was supported by a program reminiscent of the U.S. "cash-for-clunkers" initiative from 2009.
The accompanying line chart illustrates the proportion of NEV sales compared to other fuel types in China.
Over 6.6 million vehicles sold last year benefited from government subsidies, which reached up to $2,800 for NEV purchases and $2,000 for more fuel-efficient combustion engine vehicles. Official data indicates that over 60% of these subsidized purchases were for NEVs.
On Wednesday, Beijing announced an extension of the auto trade-in subsidies through 2025 as part of a broader consumer trade-in initiative aimed at stimulating economic growth. Deutsche Bank analyst Bin Wang projected that this vehicle trade-in subsidy program could enhance full-year demand in 2025 by an additional 3.0 million units.
Overall, car sales are anticipated to grow by 2% this year, while NEV sales are expected to increase by 20%, potentially comprising 57% of China's total car sales, according to CPCA forecasts.
This indicates that the sales growth of electric vehicles (EVs) and plug-in hybrid cars in 2025 may be the lowest since 2021, despite Cui's estimation that government subsidies will remain at peak levels this year.
In parallel with the sales increase, China's automotive sector has experienced a decline in profitability over the years. The sales profit margins stood at 4.4% during the first 11 months of 2024, down from 5% in 2023 and 6.2% in 2020, as reported by the association.
Additionally, suppliers and dealers have been adversely affected by a prolonged price war, which has compelled them to either reduce component prices or provide more substantial discounts.