Jun 13, 2024 05:03 AM
CHINA
Subsidies and Price Cuts Drive China’s Car Sales Recovery in May
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Car buyers can now receive subsidies of 7,000 yuan for updating their fuel cars or 10,000 yuan for purchasing new energy vehicles.
China’s car sales recovered in May, thanks in part to government subsidies. Retail sales of passenger cars dropped 1.9% from a year earlier to 1.71 million units in May, but grew 11% from April, the China Passenger Car Association said Tuesday.
The May results significantly improved from April sales, which were down 5.7% year-on-year and 9.4% from March.
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- China's passenger car sales in May increased 11% from April to 1.71 million units but declined 1.9% year-on-year.
- Government subsidies and tax policies have spurred demand, especially for new energy vehicles (NEVs), which rose 38.5% year-on-year to 800,000 units.
- EU tariffs on Chinese electric cars will rise to as much as 48%, potentially reducing Chinese imports to Europe by a quarter.
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Who’s Who
- BYD
- BYD intensified the price war in the automotive market by cutting the prices of many popular models in February 2024, leading other EV-makers to follow. This contributed to the increased competition amidst slowing demand for battery-powered vehicles.
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What Happened When
- December 2023：
- New requirements for the purchase tax exemption for NEVs were released by the Ministry of Industry and Information Technology, the Finance Ministry, and the State Taxation Administration.
- February 2024：
- BYD intensified the price war by cutting prices of many popular models, leading other manufacturers to follow.
- April 2024：
- Retail sales of passenger cars declined 5.7% year-on-year and 9.4% from March 2024.
- End of April 2024：
- Government subsidies for replacing old cars with new ones were introduced, sparking significant consumer demand.
- May 2024：
- China's vehicle sales recovered, growing 11% from April 2024.
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