China, the world’s largest auto market, reported a sales increase of 9.5% in 2022. However, the market growth is reportedly weakening as December demands dropped, ABC News reported citing CAAC.
Situation in China
China Association of Automobile Manufacturers reported that SUVs, sedans, and minivan sales increased to 23.6 million in 2022. Meanwhile, the overall auto sales grew 2.1% to 26.9 million, including buses and trucks.
Despite this growth, December saw a year-on-year decline of 6.7% to 2.3 million. The report claimed that this drop in demand is influenced by COVID-related restrictions that hindered customers’ spending. Apart from this, the report emphasized another aspect, such as the economic slowdown imposed by tighter regulations on corporate debt.
That said, 2023 may see stable growth, but hardly a 3% growth in yearly sales is possible, according to CAAC’s prediction.
Challenges hindering the Chinese auto market’s growth
China’s economy struggled to fully recover due to the COVID-19 outbreak in its cities. Its growth was also affected by the US and Europe‘s reduced foreign reliance.
In retrospect, the country’s auto sales reported an increase totaling 24.7 million units. However, it significantly declined in 2020 to 20.2 million due to COVID-related restrictions in dealerships.
That said, private sector analysts and the World Bank forecasted China’s 2022 economic growth to expand by only 3%. This year, a 4.4% growth was predicted by the International Monetary Fund. However, the report notes that the rate is among the country’s lowest increase records in the past three decades.
China’s auto sales – 2022
CAAC revealed that HEV and BEV sales recorded a 93.4% growth to 6.9 million last year.
Specifically, BEV sales increased 81% to 5.4 million units. Meanwhile, HEV sold 1.5 million units, representing a 160% increase.
On the other hand, ICE vehicle sales saw a 25.3% drop to 1.3 million in December 2022.
It is worth noting that over half of the world’s EV sales come from China. It accounted for 25.6% of auto sales, as per CAAC.
The industry group further claimed that Chinese brand sales saw a 22.8% increase to 11.8 million last year. That figure represented 49.9% of the market.
Meanwhile, December saw a YoY growth in sales of 12.7% to 1.3 million.
China is the most valuable market in the auto industry. International automakers put in a lot of effort to penetrate the Chinese market as it shows a significant growth prospect. However, challenges brought by the COVID-19 pandemic and other issues adversely affected the country’s economy. Nonetheless, it is expected to recover further this year.
