On September 10, the China Association of Automobile Manufacturers (CAAM) released data showing that both the production and sales of automobiles in China declined year-on-year in August this year. This marks the third consecutive month of year-on-year declines in automobile production and sales.
According to the data released by CAAM on the 10th of September, in August this year, the production and sales of automobiles in China were 2.492 million and 2.453 million respectively, with month-on-month growth rates of 9% and 8.5% respectively, while year-on-year declines were 3.2% and 5% respectively.
Specifically, in the Chinese market in August, 1.942 million vehicles were sold, a year-on-year decrease of 10.7%; during the same period, 511,000 vehicles were exported, showing a 25.4% year-on-year increase.
Regarding the significant year-on-year decline in production and sales of automobiles in the Chinese market, Chen Shihua, Deputy Secretary-General of CAAM, analyzed to Caixin that the current weak domestic consumption, with automobiles being a major consumer good, has led to low consumer confidence in automobile consumption.
Overall, from January to August this year, a total of 14.992 million automobiles were sold in China, a year-on-year decrease of 1.8%.
The sluggish sales in the Chinese automobile market can also be seen in the August Purchasing Managers’ Index (PMI) for the manufacturing sector released earlier. The data shows that the PMI decreased by 0.3 percentage points to 49.1 in August, falling into the contraction territory below 50, and also dropping to its lowest level since July 2023, indicating a contraction in production activities of manufacturing enterprises in August. The average capacity utilization rates of the full-steel and semi-steel tires, which are related to the automobile industry, both experienced a slight decline in August.
While domestic automobile production and sales are declining, the growth rate of automobile exports is noticeably slowing down. Data shows that in the first eight months of this year, 818,000 electric vehicles were exported, a 12.6% year-on-year increase. In 2022 and 2023, the year-on-year growth rates of electric vehicle exports were 120.2% and 77.6%, respectively. However, based on current data, the growth rate of electric vehicle exports is significantly slowing down.
Caixin believes that the main reason for the decline in electric vehicle exports is the European Commission’s anti-subsidy investigation against Chinese electric vehicle manufacturers. In October 2023, the European Commission initiated an anti-subsidy investigation against Chinese electric vehicle manufacturers. On July 4, 2024, the European Commission ruled to impose a temporary anti-subsidy tariff on Chinese electric vehicles for four months. Before the end of October, EU member states will vote on the final ruling of the investigation. Once approved, the EU will impose a formal anti-subsidy tariff on Chinese electric vehicles for five years.