Consumer confidence is weak! Domestic sales of Chinese cars fell for 12 months in a row, as car dealers rely on exports to make up for their losses

Data released by the China Passenger Car Market Information Association (CPCA) pointed out that due to the five-year downturn in the real estate market, which has led to weak consumer confidence, as well as the impact of the government's reduction in subsidies for new energy vehicles, China's domestic car sales fell for the 12th consecutive month in September, and the export of new energy vehicles surged, slightly offsetting the impact of plummeting domestic demand on car manufacturers.

CPCA said that China’s domestic passenger car sales fell by 28.1% in September, the largest decline this year and the 12th consecutive month of decline; among which, sales of fuel vehicles fell by 43% to 534,000 units, and sales of pure electric vehicles and gasoline-electric hybrid vehicles fell by 16.7% to 1.084 million units. In the first nine months of this year, China's domestic passenger car sales totaled 7.758 million units, a year-on-year decrease of 12.8%.

In China, September to October is usually the peak season for car sales. It is known as the "Golden Nine and Silver Ten". All major automobile companies will make every effort to achieve their annual sales targets. However, dealers' sales performance continued to be sluggish as consumer confidence continued to be weak.

A previous CPCA survey showed that although car manufacturers launched a series of new models in September and dealers also conducted active promotional activities, these measures did not significantly increase sales. Consumers have become more price-sensitive, adopted a more cautious attitude towards car purchases, and delayed car purchase decisions.

In addition to weak consumer confidence, analysts at Nomura Securities attributed the decline in China's domestic passenger car sales to the government's reduction of trade-in subsidies and the gradual elimination of tax incentives for new energy vehicle purchases.

Compared with sluggish domestic sales, China's overseas car exports surged 73.2% in September to 923,000 units, of which new energy vehicles accounted for more than half. CPCA said that in September, 558,000 new energy vehicles were exported, an annual increase of 163.5%. The cumulative exports in the first nine months of this year were 3.887 million units, an annual increase of 138.8%.

According to the latest statistics released by the China Association of Automobile Manufacturers, China's overall new energy vehicle exports in the first nine months of this year totaled 4.006 million units; of which, the number of gasoline-electric hybrid vehicles exported to the EU in the first seven months reached 217,000 units.