According to the latest production and sales data released by China Association of Automobile Manufacturers (CAAM) on November 10, 2022:
In October 2022, the Chinese auto market sold a total of 2.505 million new cars, representing a year-on-year increase of 6.9%. From January to October 2022, the market’s cumulative sales volume reached 21.975 million vehicles, representing a year-on-year increase of 4.6%.
The new energy market continued to maintain rapid growth, with sales of 714,000 units in October, an increase of 81.7% year-on-year, and its market share reached 28.5%. From January to October, cumulative sales of new energy vehicles reached 5.28 million units, an increase of 1.1 times year-on-year, and its market share reached 24%.
In addition, China’s auto exports in October reached 337,000 vehicles, of which 109,000 were new energy vehicles, accounting for 32.3%.
From January to October, China’s cumulative export volume was 2.456 million vehicles, of which 499,000 were new energy vehicles, accounting for 20.3%.
The main reasons for the increase in new energy vehicle sales by companies include:
- Policy Promotion
Under a series of related policies and measures such as subsidies for new energy vehicle purchases, exemption of purchase tax, government guidance and policy support, the market share of new energy vehicles is gradually increasing.
- Market Pull
The effective pull of market demand in 2022 has resulted in strong performance of new energy vehicle sales throughout the year, with policy-driven enterprises shifting towards market-driven ones. China’s leading the world in incremental demand is mainly due to the push of China’s new energy vehicle market towards marketization, forming strong endogenous growth momentum.
- Increasing Penetration Rate of China’s New Energy Vehicles
In the first three quarters of 2022, China’s new energy passenger car market sales volume reached 4.351 million units, and the market penetration rate increased to 25.7%. In the passenger car market alone, the market penetration rate of new energy vehicles has already achieved and exceeded the target of a new energy vehicle market share of around 20% by 2025, which was previously expected. All this was achieved in the context of factors such as repeated epidemic outbreaks, chip shortages, and rising raw material prices.
- China’s New Energy Industry Chain is Improving
China has a relatively complete industrial chain for the production of new energy vehicles. Battery manufacturers such as CATL, BYD, and SVOLT, and chip manufacturers such as SMIC, Horizon Robotics, and Black Sesame Technologies can reduce production costs and promote the production and sales of new energy vehicles.
- Fuel Prices for Gasoline Cars Continue to Rise
With the supply of the petroleum market unable to meet demand, gasoline prices continue to rise. New energy vehicles save a lot of money in travel costs compared to ordinary gasoline cars, so more and more people choose new energy vehicles.
Since the total sales volume of China’s automobiles has not changed much, it is obvious that the sales of traditional gasoline cars are not optimistic as the sales of new energy vehicles continue to increase.
However, Chinese domestic car brands have not experienced a significant decline. For example, Geely Automobile sold a total of 152,263 vehicles in October, a year-on-year increase of 36%, with a surge in new energy vehicle sales; Great Wall Motors sold a total of 217,816 vehicles in October, a year-on-year increase of 169%; although Great Wall Motors experienced a certain decline, its total sales volume in October decreased by 10.58% to 100,200 vehicles, and did not experience a major collapse.
However, in terms of joint venture brands, the sales volume in 2022 can be described as a major collapse. We have compiled the sales performance of multiple joint venture brands in 2022:
As can be seen, sales of many joint venture brands including Changan Mazda, GAC Mitsubishi, Beijing Hyundai, Dongfeng Nissan, and SAIC-GM Buick have declined more than 20% year-on-year, and many other joint venture brands have also experienced varying degrees of sales decline.
In addition, many traditional gasoline car companies have also suffered from the impact of the new energy era. The global automotive industry is in a new era of product transformation. Many established car companies are not willing to move from vested interests to new arenas, and most of them rely on their own successful models to maintain market share. If they do not make a timely transition to the era of electrification, they may be eliminated by the market.
Overall, the decline in sales of gasoline cars is a good thing for Chinese car companies, as new energy is the ultimate goal of China’s development. The continuous increase in the penetration rate of new energy will drive China’s economic development.# 这是一个标题
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This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email firstname.lastname@example.org.