China's Auto Market Faces Domestic Slump Countered by Thriving Exports

China's auto sales slumped 7.4% in June year-on-year, while exports surged by 29%. Domestic sales have been weak, but rising exports, especially of gasoline vehicles, have offset this. The largest export market is Russia. The EU recently imposed duties on Chinese EVs. Manufacturing shifts include new BYD plants overseas.

Devdiscourse News Desk | Beijing | Updated: 10-07-2024 15:03 IST | Created: 10-07-2024 15:03 IST
China's Auto Market Faces Domestic Slump Countered by Thriving Exports
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Chinese auto sales faced a significant slump in June, reflecting a stagnant domestic economy, according to an industry association's report on Wednesday.

The China Association of Automobile Manufacturers reported a 7.4% drop in sales year-on-year to 1.8 million cars. Despite this, exports saw a remarkable 29% increase, reaching 400,000 units.

In the first half of the year, exports rose 31.5% whereas domestic sales showed a marginal 1.6% increase. This surge in exports is raising concerns in Europe and the United States over the influx of cheaper China-made vehicles.

While China's electric vehicles (EVs) have drawn the most attention, the growth in exports mainly involves gasoline-powered cars, which rose 36% in the first half and made up 78% of total vehicle exports. EV exports dipped 2.3%, but hybrids jumped 180%.

With China's domestic market leaning more towards EVs and hybrids, exports of gasoline vehicles have helped balance the slack. Russia remains the largest and a rapidly growing export market for China, followed by significant markets in Brazil, Mexico, the UAE, Saudi Arabia, Belgium, and the UK.

The European Union recently imposed provisional duties on Chinese EVs, citing unfair advantages due to governmental subsidies.

In response, Chinese firms like BYD are expanding manufacturing overseas, with new plants in Thailand and planned factories in Brazil, Hungary, and Turkey.

June's drop marks the second consecutive month of domestic sales decline for China, amid a prolonged real estate crisis that has hurt economic growth and consumer confidence.

(Disclaimer: With inputs from agencies.)

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