In November 2024, China’s light vehicle market maintained its strong performance since October, with domestic light vehicle sales reaching 2.8 million units (excluding exports). This represents an increase of 13.0% year-on-year and significant growth of 12.6% month-on-month. The continuing effects of cancellation and exchange policies, coupled with the “Double Eleven” promotion and the Guangzhou Auto Show, have steadily strengthened the market.
By model type, passenger vehicle (PV) sales were dominated by 2.6 million units, showing a significant year-on-year increase of 16.3% and a significant month-on-month rise of 12.5%. In contrast, light commercial vehicles faced challenges, recording an increase of 14.0% month-on-month but a significant decrease year-on-year of 15.7%. For the first eleven months of 2024, cumulative sales of LV reached 22.5 million units, approximately equivalent to the same period in 2023, with an annual growth rate of 0%. Within this total, PV sales amounted to 20.3 million units, registering a marginal year-on-year increase of 1.3%, while commercial vehicle sales amounted to 2.2 million units, indicating a more pronounced year-on-year decline of 11.1%.
Source: Global Data
Based on the data, China’s domestic market witnessed an acceleration for the second consecutive month in November. The estimated sales rate reached 28.4 million units per year, the highest rate for the year so far, although it remained below the level of 29-30 million units per year seen in the summer of 2023.
Since the introduction of cancellation and renewal policies, along with old versus new incentives, their impact has exceeded that of real estate stimulus measures. According to the latest data released by the Ministry of Commerce, as of November 18, 2024, the total number of vehicle cancellation and renewal orders, as well as replacement subsidies, has exceeded 4 million nationwide. Despite the short implementation period for the replacement and renewal support, the rate of increase significantly outpaces the growth in cancellation and renewal numbers, indicating a strong underlying demand for vehicle replacement and purchase among the population.
The National Cancellation and Renewal Support Standards offer various incentives, including a subsidy of CNY 20,000 ($2,700) for the purchase of new energy passenger cars and a subsidy of CNY 15,000 ($2,100) for the purchase of 2.0-liter gas passenger cars. Or less. Since canceled and upgraded new energy vehicles (NEVs) have an additional subsidy benefit of CNY 5,000 ($685) compared to fuel vehicles, the vast majority of canceled and upgraded users, and some old versus new users, choose to purchase NEVs. In particular, the support policy has fostered strong growth in pure electric vehicle (EVs) and narrow PHEV markets, further strengthening the basis for expanding new energy penetration.
In November 2024, China’s low-cost vehicle production reached 3.4 million units, reflecting a significant year-on-year increase of 12.0%. This growth confirms the dynamism of the market and the effectiveness of recent policy measures in stimulating the automotive industry. The PV sector was a major driver, with a total of 3.1 million units produced, representing a significant year-on-year increase of 15.0%. Factors contributing to this growth include policy incentives, year-end launches of new models, and attractive retail promotions that have captured consumer interest. In addition, unexpected growth in exports has significantly affected production levels. Despite the overall positive trend, the commercial vehicle segment witnessed a decline, with production falling by 13.5% year-on-year to 276 thousand units. This contraction may indicate broader economic challenges and the effects of regulatory changes within the industry.
On the other hand, the production of Chinese OEMs shows a positive trend, with a year-on-year increase of 25.6%. In contrast, the production of joint venture brands saw a significant decline of 10.4% year-on-year. Production cuts by joint automakers have somewhat limited overall production growth in the Chinese market. This shift highlights the transformation taking place in the country, where local automakers are advancing, while corporate brands need to re-evaluate their strategies to remain competitive.
China’s low voltage export market saw a modest year-on-year increase of 2.3% in November, although it saw a significant month-on-month decline of 10.9%, with a total of 458,000 units shipped overseas. Overall export momentum has slowed significantly. Breaking down the numbers by model type, PV exports reached 414,000 units, representing an increase of 3.4% year-on-year but a decrease of 10.9% month-on-month. Persistent organic compound exports also faced challenges, with 44,000 units exported, showing a decline of 7.2% year-on-year and a decline of 10.8% month-on-month. Cumulatively from January to November 2024, LV exports reached 5.1 million units, showing a strong growth of 26.8% year-on-year. The slowdown in exports for November 2024 can be primarily attributed to market volatility, shifts in the international environment, and a slowdown in the export of new energy vehicles. These monthly fluctuations also indicate that China’s automobile industry still faces many challenges in its journey toward globalization. These include policy changes in foreign markets, fluctuations in external demand, and competitive pressures.
“China’s Domestic Policy-Driven Growth vs. International Market Challenges – GlobalData” was originally created and published by Just automaticwhich is a trademark of GlobalData.
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