BEIJING, January 11 (TMTPost)— The industry body expected China’s auto industry will break another annual record following 2023, a year saw double-digit increases in both output and sales. 

Credit：Visual China

China’s car sales and output for the first time each topped 30 million units in a year. In the year 2023, sales increased 12% year-over-year (YoY) to 30.094 million vehicles, and output rose to 30.261 million units with a 11.6% YoY growth, according to data released by China Association of Automobile Manufacturers (CAAM) on Thursday. The growth of auto sales and output accelerated, up 9.9 percentage points and 8.2% points from the previous year, respectively.

CAAM commented the auto industry turned positive after a soft start and gradually improved through 2023. sales and output in the first two months dropped significantly, partially due to discontinuation of tax breaks for fossil fuel cars and new energy vehicle (NEV). From March to April, spending on vehicle slowly recovered, driven by wave of promotions. From May to October, the vehicle demand steadily unlocked as stimulus introduced by both the central government and local authorities. Since November, the market extended well development of the traditional peak season in September and October, and manufacturers also played an active role with discounts or other promotions as they are striving to meet their annual sales goals.  

China’s passenger vehicle market also set annual records in 2023. This is the ninth straight year for the market to deliver more than 20 million vehicles. A total of 26.124 million passenger vehicles made during the year, with a 9.6% YoY increase, and sales jumped 10.6% YoY to 26.063 million units.

NEVs, including the battery electric vehicles (BEVs) and the plug-in hybrid electric vehicle (PHEVs), acted as a significant impetus for the year. NEV sales and output surged 35.8% and 37.9% YoY, respectively. The NEV sector occupied 21.6% of the auto market, increasing 5.9 percentage points from its share in 2022. NEVs accounted for 34.9% in passenger vehicle output of the year, and 34.7% in the annual sales. China’s NEV industry maintained the top in the world for nine years in a row, CAAM said.

CAAM said exports are major force to drive sales and output. It estimated China exported a record of 4.91 million vehicles in 2023. The new record represented a 57.9% increase from the previous year. Exports contributed 55.7% to growth of the total auto sales. exports of finished automobile increased 41.5% YoY to 524,000 units in November, and 152,000 of them are NEVs with more than fourfold YoY increase, CAAM complied data from the General Administration of Customs of China. From January to November, auto exports totaled 4.762 million units, up 59.6%, and NEV exports soared 66.2% YoY to 1.591 million units. In terms of export destinations, Russia became leader in importing vehicles from China, highlighting ongoing momentum of Chinese automakers’ filling vacuum since the Russia-Ukraine war initiated in February 2022. 841,000 vehicles exported to Russia in the first eleven months of 2023, 5.5 times bigger than the same period a year ago. Mexico, as the No.1 export destination in 2022, received 376,000 vehicles in the eleven months, with a 130% YoY growth. Belgium took the third place with imports of 202,000 units. Belgium, U.K. and Thailand were the top three destinations for Chinese NEVs. 

Looking forward, CAAM expected auto sales will hit 31 million units in 2024, with an at least 3% YoY increase. Sales of passenger vehicles will grow 3% YoY to 26.8 million units and that of commercial vehicles to be 420,000 units, up 4% YoY. NEV sales are expected to be 11.5 million units, and exports to be 550,000.