BYD car - New Energy Vehicles Outperform Other Segments

In the wake of China’s resolve in combat against diesel emissions, the auto industry in the country saw a continuing decline in both output and sales, registering respectively a slump of 4.4 percent to 2 million and 3.8 percent to 2.1 million in August.

New energy vehicles outshone against such a slim picture. Output and sales of NEV in China soared by 39 percent and 49.5 percent year-on-year to 99,000 and 101,000, according to China Association of Automobile Manufacturers.

In the period of Jan. to August 2018, production and sales of NEV in China increased respectively by 75.4 percent and 88 percent year-on-year to 607,000 and 601,000.

A BYD concept car is seen at the Shanghai Auto Show on April 25, 2017. BYD topped China’s new energy vehicle sales list in August 2018. [Photo/VCG]

In the first eight months of 2018, China registered in production and sales of autos mild increases of 2.8 percent and 3.5 percent to 18.13 million and 18 million. The CAAM said, the overall performance of the auto industry stays in line with their estimates at the beginning of this year despite the slowdown.

Read Also: Electric Vehicles Will Triple by 2020

Passenger vehicles including SUVs, sedans and MPVs all saw decline in output and sales in August, with the two figures for MPVs falling the worst by 16.7 percent and 13.8 compared with the same period of 2017.

The continuing drop in SUV sales dragged down sales of Chinese passenger car brands. Take for example, Great Wall Motor, who once was dominant in SUV market with its Haval range, reported a 19.2 percent decline in sales in August. State-owned Chang’an Auto Group also saw a 31.7 plummet.

The China Passenger Car Association, an automotive market research institute,  has significantly adjusted its estimate for PV market growth in 2018 in response to industry downturn, from 4 percent to 1 percent.

Kou Nannan, a senior associate with Bloomberg, said the surge in production and sales of NEV reflects a kind of “consumption in advance,” and with the gradual reduction of subsidies from Beijing, the growth rate would be no longer so drastic.

Under a new policy, subsidies for NEV with a driving range less than 150km stopped on June 12, and those for vehicles with a range of 150km to 300 km will be reduced to the minimal level.

Industry insiders say, the new policy of subsidy cut is designed to push the industry to upgrade and develop in high-quality segments, and avoid irrational expansion.

China has been the world’s biggest NEV market for three years in a row, and is likely to meet a prospect of market expansion. The government expects NEV production to hit 2 million in 2020, and sales to claim up to 20 percent of the overall auto market by 2025.

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