BEIJING/SHANGHAI (Reuters) -China’s passenger vehicle sales rose 25.5% in November from a year earlier, faster than the prior month and extending growth to a fourth month, industry data showed on Friday, as automakers stepped up a price battle to meet sales goals.
Car sales totalled 2.1 million units last month, data from the China Passenger Car Association (CPCA) showed, while growth accelerated from October’s 9.9% jump.
Sales of new energy vehicles – electric vehicles and plug-in hybrids – grew 39.8% in November from a year earlier, surpassing a 37.5% rise in October and accounting for 40% of total car sales as promotions and discounts intensified towards the year-end.
Companies have increasingly sought to spur car purchases amid an anaemic economic recovery.
Sales promotions launched in November by major electric vehicle maker BYD and other producers have continued into this month, with more automakers joining the fray.
A new package of tax breaks for new energy vehicle purchases through 2027 imposes caps on tax exemptions starting in 2024, which will add to the cost of higher-priced models and has served as a tailwind for year-end sales.
The association forecast that China’s passenger vehicle sales would hit 22.2 million in 2024, up 3% from this year, while growth could reach 5% if exports to Russia continue their robust rise.
BYD set another sales record in November, although there were only slight gains from October, and it is on course to become the first domestic automaker to hit 3 million vehicle sales annually.
EV upstarts including Li Auto, Xpeng and Leapmotor also achieved record deliveries in November. Huawei-backed EV brand Aito has shown rapid growth, delivering more than 10,000 of its revamped M7 cars for a second month in November.
But the association’s secretary general Cui Dongshu said dealers in China are facing tremendous pressure to meet operational and sales goals near the year-end, and this has depressed their earnings.
Tesla, which kicked off a price war in China at the start of the year that has pulled in more than 40 brands, has reversed course with five upward price adjustments since late October.
Tesla is expected to put a higher priority on its Shanghai factory’s margins in 2024, CMB International said in a note.
The U.S. EV maker’s exports of China-made EVs totalled 16,928 in November, down 61.1% from October, according to the association’s data. China’s overall passenger vehicle exports edged down 3% from October to November.
(Reporting by Qiaoyi Li, Zhang Yan and Brenda Goh; Editing by Jamie Freed, Mark Potter and Edmund Klamann)
