The automotive industry in China is recovering. According to the weekly report data from key enterprises, the China Association of Automotive Manufacturers released the analysis. In May 2022, the sales volume of the automotive industry reached 1.77 million units. It was at a month-on-month increase of 49.59% and a year-on-year decrease of 17.06%. Furthermore, from January to May of this year, the sales volume is expected to be 9.46 million units. Therefore, it will be a year-on-year decrease of 13.11%.
Since 2022, both the supply and demand sides of the new energy vehicle market have faced greater pressure.
The supply side of automotive industry in China is struggling
On the supply side, large-scale epidemics have occurred in many parts of the country. As a result, some vehicle and supply chain supporting factories stopped production. At the same time, the prices of raw materials such as chips, steel, aluminum, and batteries have continued to rise, pushing up production costs. Many car companies announced price increase plan.
The demand side of is shrinking
On the demand side, there are more complex and severe international environment. Not to speak the obvious shock of the domestic epidemic. As a result, the downward pressure on the economy has further increased while consumer demand is relatively weak.
In order to boost the market, China has introduced relevant policies to promote automotive consumption. Subsequently, various local rescue policies come into effect intensively. For instance, issuing automotive consumption coupons, lottery land other methods.
Under this circumstance, the sales of most automotive companies in May rose sharply month-on-month. It shows signs that the automotive industry of China is picking up. With more people buying, the leverage function of economy will behave automatically. Deep Digital China will continue to report on this topic. If you are in automotive industry and need advice from us, please reach out directly.