As one of the world’s largest automotive markets, the Chinese automotive industry continues to show resilience and growth despite global challenges. Amidst factors such as the ongoing COVID-19 pandemic, chip shortages, and changing consumer preferences, the Chinese automotive market has managed to maintain its upward trajectory. This article delves into the current state of the Chinese automotive market, exploring factors driving its success and highlighting key trends shaping the industry’s future.
China as the world’s largest automotive market represents ~30% of global sales – despite being affected by the COVID-19 pandemic in the beginning of 2020. 25.3 million cars were sold (-1.9% YoY) in 2020 and passenger and commercial vehicle contributed 80% and 20% share respectively. Booming NEV sales also drove the market with 1.3 million sold units (+11% YoY). Up to the end of September in 2021, the entire car market has reached sales volume of 18.6 million (+8.7% YoY) with 2.2 million NEV sold (+190% YoY), which has surpassed NEV sales performance of 2020 entire year.
As a key pillar industry, China is supporting the domestic automotive industry strongly – via high-level development targets and subsidies, regional strategies, and incentives:
Strategic Policy: Made in China 2025 has the explicit goal of raising the domestic content of core components in key industries, and also sets clear performance targets for future automotive vehicles.
Industry Support: The government further promotes the NEV sector via relaxations for foreign investment, lower entry thresholds, as well as tax subsidies and exemptions.
Regional Competition: Provinces (such as Anhui, Jilin or Guangdong) try to position themselves as future automotive hubs by setting out ambitious targets and support policies.
Though automotive industry has recovered from the disruption of Covid-19 this year, it is still challenged by short-term factors such as short supply of electricity caused by coal shortage, high position of commodity value, shortage of critical components, and high cost of international logistics, etc.
The Chinese automotive market retains its position as a key player amidst global challenges, exhibiting resilience, growth, and adaptability. With its focus on electric vehicles, technological innovation, and a highly competitive domestic market, China’s automotive industry is poised for a transformative future. As the world watches China lead clean mobility initiatives and revolutionize the autonomous driving landscape, the future of the Chinese automotive market remains promising.
Post time: Mar-21-2023
