Recent data from the Chinese automobile market reveals significant trends that have emerged in October. While domestic sales continue to struggle, experiencing a sharp year-on-year decline of 27%, exports are witnessing remarkable growth, surging by 68%. Industry experts have highlighted a major underlying issue: the after-sales service system for automotive exports is seriously lagging behind, creating structural contradictions in the market.
The China Association of Automobile Manufacturers projected on November 11 that the domestic sales of passenger vehicles this year are expected to drop below 19 million units, marking the first time this figure has fallen since 2014. In stark contrast to the sluggish domestic market, the country’s automobile exports are expected to see an upward trajectory, with total exports likely to exceed 11 million vehicles by the end of the year.
According to the latest figures released by the China Passenger Car Association, the traditionally high-demand “golden September and silver October” season showed no significant effect this year. In October, the domestic sales of passenger vehicles totaled 1.643 million units, reflecting a year-on-year decrease of 27.1%. Cumulatively, from January to October, retail sales reached 14.978 million units, a decrease of 22.3% compared to the same period last year.
In a notable shift, automotive exports have emerged as a vital driving force supporting overall sales in October. The export volume of passenger vehicles reached 928,000 units that month, which represents a robust year-on-year increase of 68.5%.
When examining specific vehicle types, the retail sales for sedans saw the most significant decline at 38%, while multi-purpose vehicles (MPVs) dropped by 30%, and sports utility vehicles (SUVs) decreased by 17%. The most noteworthy decline was in the sedan category.
In the realm of power types, the domestic retail sales of new energy vehicles (NEVs) stood at 1.109 million units in October, down 13.7% from last year. However, due to the rapid decline in traditional fuel vehicle sales, the retail penetration rate for NEVs—percentage of NEV sales compared to total sales—reached an all-time high of 67.5%.
Reports from mainland media have pointed out that despite the rapid growth of China’s new energy vehicle exports, the after-sales service system has not kept pace, resulting in a “fast sales, slow repairs” structural contradiction.
At a recent conference focused on innovative development models for the automotive industry, Zhang Yanhua, president of the China Automobile Maintenance Industry Association, spoke about the structural contradictions arising from the mismatch between vehicle delivery and after-sales service capabilities. He emphasized three primary areas of concern: the inadequacy of service network coverage and actual repair capabilities, the insufficient supply chain for parts to meet overseas repair demands, and the urgent need to strengthen local service capabilities.
Zhang also highlighted that the pressure on after-sales services is expected to manifest more prominently over the next two to three years.
According to Sun Xiaohong, the former secretary-general of the automotive branch of the China Chamber of Commerce for Import and Export of Mechanical and Electrical Products, the service system will play a crucial role in determining whether Chinese brands can establish a strong presence in overseas markets. She observed that while there are approximately 30 overseas parts warehouses for Chinese brands, international brands boast around 600, indicating a significant gap. In terms of service network density, Chinese brands are only about 1/8th to 1/10th as dense as their international counterparts, suggesting a substantial effort will be needed to close this divide, which could take around five years.
Currently, many overseas owners of Chinese electric vehicles are beginning to face specific repair challenges with local repair shops.
Reports from British automotive media indicate that Ora Good Cat, under Great Wall Motors, is grappling with a serious parts shortage in the UK. One owner in Norwich experienced a malfunction in the vehicle’s charging system and had to wait nearly three months for parts to be shipped from China, rendering the car unusable during that period. Local electric vehicle repair experts have stated that launching such vehicles without sufficient parts support in a market is a disaster for owners.
In August of this year, Dutch insurance company Univé released a report examining the “repairability and after-sales guarantee” of emerging automotive brands in the European market. The report highlighted three major concerns for European owners when it came to repairing Chinese vehicles: high costs for electronic components and sensors, direct total loss assessments for electric vehicle batteries upon malfunction, and potential wait times for special parts stretching up to five months.
The immediate repair pressure faced by owners stems largely from the complex electronic control systems in these vehicles. If a vehicle suffers significant damage or is involved in an accident, a single control module or specific sensor could cost over 10,000 euros to replace. Currently, the average repair cost for such vehicles in the European market exceeds 1,500 euros.
The report pointed out that pure electric vehicles might present even more challenges. Once a battery fails, the replacement cost is so high and repairs yield little economic benefit that insurance companies are increasingly likely to classify the vehicle as a total loss. Typically, insurance payouts are calculated based on the vehicle’s residual value and depreciation, which could result in financial losses for owners.
In Turkey, online consumer complaint and resolution platform Sikayetvar lists BYD Dolphin as one of the most complained-about Chinese models, with customers often citing issues related to waiting for parts. One owner reported a charging port fault only ten days after taking delivery of the vehicle, and repair took a month because parts had to be shipped from China. Another owner, whose vehicle was in an accident, has been unable to determine both the availability of replacement parts and the completion date of repairs since sending the car in for service in August.