Analysis: The Hidden Risks in China’s Auto Surge

Since China implemented the trade-in subsidy program for consumer goods in 2024, there has been a notable increase in sales of most eligible products. However, automobiles, which are a big-ticket item eligible for the subsidies, saw their retail sales value drop 1.9% year-on-year in the first five months of this year.

Adding to the puzzle is that automakers’ shipment volumes in the period rose 12.6% year-on-year, according to data from the China Association of Automobile Manufacturers.