China's Vehicle Sales Slump Despite Record NEV Surge

Passenger vehicle sales in China fell for the fifth consecutive month in August, dropping 1.1% year-on-year. Despite this, sales of all-electric and plug-in hybrid vehicles surged by 43.2%, aided by subsidies. Car exports rose 24%, yet the overall market reflected decreasing consumer confidence and financial challenges for dealerships.

Passenger vehicle sales in China continued their decline, falling 1.1% in August compared to the same month last year, marking the fifth consecutive monthly drop. However, all-electric and plug-in hybrid models saw a significant rise in sales, jumping 43.2% due to subsidies for drivers trading in older, more polluting vehicles.

Data from the China Passenger Car Association showed that new energy vehicles (NEVs) reached a record 53.5% of total car sales. Notably, local EV giant BYD achieved record sales, while U.S. competitor Tesla had its best month in 2024. Car exports also increased by 24% following a 20% rise in July, highlighting strong international demand.

The overall numbers signal waning consumer confidence, with first-time car purchases lagging. Dealerships are facing financial struggles despite the rise in NEV sales, with over half suffering losses in the first half of the year. The financial woes even led to China Grand Automotive Services, the nation's second-largest dealership, being delisted from the Shanghai stock exchange.

(With inputs from agencies.)