CHINESE CAR EXPORTS SOAR, OFFSETTING FALL IN DEMAND FROM THE DOMESTIC ECONOMY

Chinese car sales slumped in June as the domestic economy continued to struggle, but strong exports helped balance out the home decline, an industry association reported on Wednesday.

Sales in China fell 7.4% compared to the same period last year, down to 1.8 million cars, while exports saw a rise of 29%, reaching 400,000 units, according to a monthly report by the China Association of Automobile Manufacturers. In the first half of the year, exports saw a boost of 31.5% while domestic sales only increased slightly by 1.6%.

This surge in exports comes amid growing worries in Europe and the US that cheap China-made cars could overwhelm established Western automakers. Much of the worry has centred around China's moderately priced electric cars, however, export growth has mainly been seen in petrol-powered vehicles.

These rose 36% in the first half of the year and made up 78% of vehicle exports. Chinese EV exports were down 2.3%, while hybrids saw a massive increase of 180% from a smaller base.

These exports have helped compensate for weaker sales of petrol vehicles in China as the overall market has stagnated and buyers have shifted towards electric vehicles and hybrids. Russia, with its rapidly expanding export market, is the largest consumer of Chinese vehicles. This growth has been facilitated by the exit of other automakers following Russia's invasion of Ukraine.

Other significant markets include Latin America's Brazil and Mexico, the Middle East's United Arab Emirates and Saudi Arabia, and Europe's Belgium and the UK. Last week, the European Union imposed provisional duties on Chinese electric vehicles, alleging that government subsidies provide an unfair advantage to Chinese automakers.

In response, Chinese manufacturers are shifting production overseas. BYD, China's leading EV manufacturer, inaugurated a factory in Thailand last week and has plans for new facilities in Brazil, Hungary, and Turkey. The recent decline in sales in China marks the second consecutive monthly drop.

Separate data compiled by the China Passenger Car Association indicates three successive months of declining sales. A severe slump in the real estate sector has slowed economic growth and undermined consumer confidence.

2024-07-10T10:58:38Z dg43tfdfdgfd