In November 2024, China's Light Vehicle (LV) market maintained its strong performance from October, with domestic LV sales reaching 2.8 million units (excluding exports). This represents a 13.0% year-on-year (YoY) increase and a significant month-on-month (MoM) growth of 12.6%. The continued effects of scrapping and replacement policies, along with the promotion of “Double Eleven” and the Guangzhou Auto Show, contributed to the steady boost in the market.
By model type, Passenger Vehicle (PV) sales dominated with 2.6 million units, showing a significant YoY increase of 16.3% and a significant MoM increase of 12.5%. In contrast, Light Commercial Vehicles (LCVs) faced challenges, with MoM growth of 14.0% but a significant YoY decline of 15.7%. For the first eleven months of 2024, cumulative LV sales reached 22.5 million units, almost equivalent to the same period in 2023, with a YoY growth rate of 0%. Within this total, PV sales totaled 20.3 million units, recording a marginal YoY increase of 1.3%, while Commercial Vehicle (CV) sales stood at 2.2 million units, showing a more pronounced YoY decline of 11.1 %.
Source: GlobalData
Based on the data, China's domestic market saw its second consecutive month of acceleration in November. The estimated sales rate reached 28.4 million units per year, marking the highest rate for the year to date, although it remains below the 29-30 million units / year level seen in the summer of 2023.
Since the introduction of scrapping and renewal policies, along with old-for-new incentives, their impact has gone beyond that of real estate stimulus measures. According to the latest data from the Ministry of Commerce, as of November 18, 2024, the total number of national applications for scrapping and refurbishing cars, as well as replacement subsidies, has exceeded 4 million. Despite the short implementation period of these renewal and renewal subsidies, the rate of increase is significantly higher than the growth in scrapping and renewal volumes, indicating a strong underlying demand for renewal and purchase of vehicles among residents.
The national scrapping and refurbishment subsidy standards offer differential incentives, including a CNY20,000 ($2,700) subsidy for the purchase of new energy passenger cars and a CNY15,000 ($2,100) subsidy for the purchase of fuel passenger cars with a displacement of 2.0 liters. or less. Since scrapped and upgraded New Energy Vehicles (NEVs) benefit from an additional subsidy of CNY5,000 ($685) over fuel vehicles, the vast majority of scrapped and upgraded, and some old -for-new, chooses to buy NEVs. The subsidy policy, in particular, has promoted strong growth in the entry-level Pure Electric Vehicles (EVs) and narrow Plug-in Hybrid (PHEV) markets, further strengthening the base for expanding new energy penetration.
In November 2024, the production of LVs in China reached an impressive 3.4 million units, reflecting a significant YoY increase of 12.0%. This growth underlines the dynamism of the market and the effectiveness of recent policy measures in stimulating the automotive industry. The PV segment has been a key driver, with a total of 3.1 million units produced, marking a significant YoY increase of 15.0%. Factors contributing to this growth include policy incentives, the launch of new models at the end of the year, and attractive retail promotions that have attracted consumer interest. In addition, the unexpected growth in exports has significantly affected production levels. Despite the overall positive trend, the CV sector has experienced a downturn, with production falling 13.5% YoY to 276k units. This decline may be indicative of wider economic challenges and the effects of regulatory changes within the industry.
On another note, the production of Chinese OEMs shows a positive trend, with a YoY increase of 25.6%. In contrast, the output of joint venture (JV) brands has seen a significant decline of 10.4% YoY. The production cuts by the JV automakers have somewhat limited the overall output growth in the Chinese market. This change highlights the transformation taking place in the country, where local carmakers are moving forward, while JV brands need to reassess their strategies to maintain competitiveness.
China's LV export market experienced a slight YoY increase of 2.3% in November, although it saw a significant MoM decline of 10.9%, with a total of 458k units shipped overseas. The overall export momentum has slowed significantly. Breaking down the figures by model type, PV exports reached 414k units, marking a YoY increase of 3.4% but a MoM decrease of 10.9%. CV exports also faced challenges, with 44k units exported, showing a YoY decline of 7.2% and a MoM decline of 10.8%. Cumulatively from January to November 2024, LV exports totaled 5.1 million units, showing a solid YoY growth of 26.8%. The slowdown in exports for November 2024 can be mainly attributed to market fluctuations, changes in the international environment, and a slowdown in the export of NEVs. These monthly fluctuations also show that China's auto industry continues to face numerous challenges in its journey towards globalization. These include policy changes in foreign markets, volatility in foreign demand, and competitive pressures.
“China's domestic policy-driven growth versus international market challenges – GlobalData” was originally created and published by Only Autobrand owned by GlobalData.
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