Domestic passenger vehicle sales (PV), excluding exports, saw a 5.4% year-on-year (YoY) increase in March and a 4.2% YoY growth in April, according to an analyst comment just made public by the respected Global Data Consutancy.* Year to date from January to April 2024, PV sales reached 6.3 million units, reflecting a 5.5% YoY increase. Mass production is higher at a +9.0% YoY at 7.6 million over the same period. This suggests that the production growth is outpacing sales volume, indicating potential market saturation or a buildup of inventory, according to GlobalData.

Two very real problems are increasing for non-Chinese global automakers. The penetration rate – or market share of the vehicles that are the future of the companies that will survive what is an historic reshaping of a global industry that is vital to so many economies. Here so-called New Electric Vehicles – [NEVs – battery electric vehicles, plug-in hybrids and range-extended electric vehicles combined] that have been heavy promoted, subsidized and pushed forward by the Chinese government are now accounting a new historical high in April of 43% share.**

“The average penetration rate for the first four months of the year stood at 38%, an increase of 3 percentage points from the 35% rate of the previous year. This robust performance underscores domestic manufacturers’ notable shift in market dynamics and strategic realignment. Since NEVs are superior to traditional fuel vehicles in terms of ownership cost and driving experience, the decline of traditional fuel (ICE) vehicles in the Chinese market is faster than expected. In addition, in the price war that has been going on last year and this year, ICE vehicles are also at a disadvantage due to the lack of opportunity for price reductions,” said Nan Zhang, Production Analyst, GlobalData.

Export Threat

Exports have played a significant role in the growth of production, with shipments in April 2024 reaching 424,000 units, a giant YoY increase of 36.9%. This represents 21% of total PV production, significantly higher than the 16% average share for the calendar-year 2023.