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Ministry of Commerce: The market share of low-end passenger cars is continuously shrinking
2024-05-15
This year, China's automobile consumption market began to decline, and after negative growth in July, passenger car sales declined again in August. Is the decline in car sales the main reason for the current slowdown in China's consumer market growth? Are there any new growth points in the Chinese automotive market in the future? At a recent routine press conference held by the Ministry of Commerce, relevant personnel Gao Feng stated that the year-on-year decline in automobile sales in August was mainly related to factors such as a large sales base last year, tariff reductions, and changes in automobile consumption structure. In addition, Gao Feng also stated that given that China is still in the development period of automobile consumption, based on considerations of new energy vehicles and exports, the Chinese automobile market will continue to maintain stable growth.
According to data from the China Association of Automobile Manufacturers, in the first eight months of this year, China sold a total of 18.096 million cars, a year-on-year increase of 3.5%, which is 0.5 percentage points higher than the annual sales growth rate of last year. Among them, the sales of passenger cars were 15.193 million, a year-on-year increase of 2.6%, which is 1.2 percentage points higher than the annual sales growth rate of last year. The overall consumption of automobiles is stable. In August, the sales of passenger cars reached 1.79 million units, a year-on-year decrease of 4.6%. The Ministry of Commerce analyzed several reasons for this:
1、 In 2017, the sales base was relatively high, and China's automobile sales have reached a new high for 9 consecutive years globally, reaching 28.879 million units. Among them, passenger car sales reached 24.718 million units, indicating a clear trend of "high-level operation". Especially since the second half of 2017, due to the expiration of the passenger car purchase tax preferential policy at the end of the year, some consumers have chosen to consume in advance, driving the monthly increase in passenger car sales. By August, a relatively high base has been formed.
2、 The tariff reduction has led to some consumers being wait-and-see. After the tariff reduction policy was officially implemented on July 1st this year, consumers generally expected car companies to adjust prices, leading to delayed consumption. At the same time, after the price reduction of some imported cars, the range of choices for consumers has further expanded, and the wait-and-see sentiment is high. However, it is worth noting that compared to the sales of 1.59 million vehicles in July, the sales in August increased by 200000 vehicles, a month on month increase of 12.6%. This indicates that with the adjustment of imported vehicle prices, consumer wait-and-see sentiment gradually dissipates, and the accumulated consumer demand in the early stage begins to be released.
3、 The structure of automobile consumption is changing. According to the analysis of the China Association of Automobile Manufacturers, as the proportion of consumers purchasing cars at once gradually decreases, the market share of low-end passenger car products continues to shrink, and products in various sub sectors are gradually developing towards higher levels. Products with medium displacement, medium to high rise sedans, SUVs, and other products have become the main driving force of market growth. The data also shows that in the first 8 months, sedan sales increased by 3.7% compared to the same period last year, and SUV sales increased by 6.2% compared to the same period last year, both higher than the overall growth rate of passenger cars in the first 8 months.
Regarding the trend and growth points of the automotive market in the second half of the year, the Ministry of Commerce predicts that the automotive market will continue to maintain stable growth, mainly based on the following considerations:
1、 China is still in the development period of automobile consumption. Although the car ownership has exceeded 200 million vehicles, the per capita ownership in third - and fourth tier cities and the central and western regions is still relatively low, and there is still potential for market growth.
2、 The preferential policies for new energy vehicles can help accelerate the promotion and use of new energy vehicles. From January to August this year, the sales of new energy vehicles reached 601000 units, a year-on-year increase of 88%. It is expected to maintain a relatively high growth rate in the second half of the year.
3、 The export of automobiles is showing an upward trend. According to customs data, China exported a total of 760000 cars and car chassis in the first eight months of this year, with a total value of 10.22 billion US dollars, an increase of 21.7% and 25.4% year-on-year, respectively. It is expected that exports will also drive an increase in car sales in the second half of this year.
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