November Saw A Decline In Car Sales In China

Auto sales in China fell 8.5 percent year-on-year in November, the second straight monthly decline and the biggest in ten months. The reason is the weakening of demand as the end of the year approaches and the reduction of state subsidies. A total of 2.24 million vehicles were sold, after a 0.8 percent drop in October.

The decline was assessed as “unusual,” as the last two months of the year are traditionally strong for sales, and the last similar disruption was recorded in 2008 during the economic crisis, reports Reuters.

Electric cars and plug-in hybrids accounted for a record 58.9 percent of total sales. In the first 11 months of this year, more than 11.2 million electric and hybrid cars were sold through subsidized vehicle replacements. However, the reduction of government incentives at the end of the year has a negative impact on consumer sentiment across the country.

Additional reasons for the decline in total sales are the strong decline in gasoline car sales and the high base from last year. Despite this, full-year sales are still expected to rise around five percent.

Market stagnation is forecast for 2026, with even stronger competition and a record number of new models. As tax breaks for EVs and PHEVs will be halved from 2026, manufacturers are now offering additional discounts of up to 15,000 yuan for orders by the end of the year, even if deliveries are not until next year.

Due to the problem of overproduction and fierce competition, the Chinese authorities have removed electric vehicles from the list of strategic industries in the five-year development plan, which portends a tougher period for the sector.

The largest domestic producer of electric vehicles, BYD, recorded a drop in sales compared to last year in November, for the third month in a row, although it recorded record exports. So far, he has achieved 91 percent of the annual goal. Tesla increased sales in China to 73,145 vehicles after a very weak October. Xiaomi shipped more than 40,000 electric vehicles for the third month in a row and has already met its annual goal of 350,000.

The export of Chinese cars has grown strongly, about 52.4 percent compared to the same period of the previous year. Most of that growth is expected to come from electric and hybrid vehicles next year as well, whose exports should grow by 40 percent, to about 2.83 million vehicles.

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