China's January car sales slump 22.7% over December, EVs record a 38.8% drop

China's automobile industry witnessed a mixed picture in January 2024, as overall passenger vehicle sales in the country surged by 47.9 per cent compared to the same month a year ago, but slumped 22.7 per cent on a month-on-month (MoM) basis compared to December 2023, reported Reuters. The new energy vehicles that have been fuelling the growth of the country's auto industry significantly, too were not immune from this trend.

The electric and electrified vehicles, commonly known as new energy vehicle (NEV) sales in the country, witnessed their sales surge by 78.8 per cent last month on a year-on-year (YoY) basis compared to January 2023 but recorded a 38.8 per cent slump compared to the previous month, sparking concerns among the automakers, revealed the report. It stated that demand faltered in the world's largest automobile market despite a renewed discounting push led by Tesla in the country.

China Association of Automobile Manufacturers (CAAM) has claimed that vehicle sales in the country, including those exported, totalled more than 24 lakh units. While this marked a 47.9 per cent YoY growth, on the other hand, there was a 22.7 slide on an MoM basis, which marked the first such slump since November 2023. The new energy vehicle sales too witnessed a MoM slump for the first time since August last year.

Reuters has cited the China Passenger Car Association (CPCA) saying that last January, passenger vehicle sales in China marked the worst performances for the month since the 2000s, as subsidies and tax cuts ended. Vehicle sales were also hit due to shortened business days as the week-long Chinese New Year fell in January last year. CAAM has revealed that China exported 443,000 vehicles in January 2024, accounting for 18.2 per cent of the total sales, while nearly one out of seven NEVs sold during the month was also exported. The report further stated that exports have been a driving force for growth for automakers in China as demand at home weakens. But its growing clout as a vehicle exporter is causing friction abroad.