INDUSTRY BRIEF: China NEV sales drop 21% in March

Retail sales of passenger new energy vehicles (NEVs) in China reached 784,000 units in March, down 21% from a year earlier but up 69% from February, reflecting a gradual rebound after the Lunar New Year holiday, according to data released on Friday by the China Passenger Car Association (CPCA).

The March total brought cumulative NEV retail sales to 1.84 million units for the first quarter, down 24% year-on-year. On the wholesale side, NEV shipments reached 1.13 million units in March, flat from a year earlier but up 56% month-on-month, while first-quarter wholesale volume stood at 2.72 million units, down 5%.

The broader passenger vehicle market also remained under pressure. March retail sales totaled 1.66 million units, down 15% year-on-year but up 60% from the previous month. First-quarter sales reached 4.24 million units, a 17% decline from a year earlier. NEVs accounted for 47.3% of total passenger vehicle retail sales for the month, underscoring the continued advance of electrification.

The CPCA attributed the year-on-year decline in March sales mainly to a holiday shift, with this year’s Lunar New Year falling in late February, leaving early March still in a post-holiday recovery phase. Rising costs for raw materials and chips, along with higher oil prices driven by geopolitical tensions, also weighed on the market, particularly affecting traditional internal combustion engine vehicles.

Meanwhile, profitability across the auto sector remains under pressure. Earlier data showed China’s auto industry generated 43.5 billion yuan ($6.33 billion) in profits in the first two months of the year, down 30% year-on-year, with margins at 2.9%, well below the broader industry average of 5.8%.

By Lee Shih Ta

To subscribe to Bamboo Works weekly free newsletter, click here