Chinese auto sales are expected to grow to 2.54mn vehicles in January, up by 31.9pc from a year ago. Passenger vehicle sales are forecast to increase by 28.4pc to 2.07mn, according to China Association of Automobile Manufacturers’ data. Sales of commercial vehicles are expected to growth by 50pc from a year ago to 480,000 units in January.
Auto sales is expected to decrease in February ahead of Chinese New Year holidays, said China Automobile Dealers Association. Authorities have restricted movement of people and good in several provinces and cities and have stopped people from returning to their hometowns to control the spread of the second wave of COVID-19 pandemic. The Spring Festival month is traditionally a lull season for automobile consumption.
China’s auto market will recover and post positive growth in 2021, according to the China Automobile Industry Association. Passenger car sales are expected to exceed 26mn, up by 4pc from 2020 with sales of new energy vehicles expected at 1.8mn, up by 40pc from the prior year, believes the association.
In January, major automakers Changan Automobile’s, GAC, FAW, BYD reported sales growth on a year-over-year basis. Changan’s sales increased by 87pc from the prior January, while GAC group’s sales rose by 23.3pc. SAIC-GM Buick brand sales rose by 26pc to 87,000 units, while FAW Toyota sales increased by 9pc to 84,000 units. BYD Motors sold 42,401 units, an increase of 68.44pc from the prior year.
Global new energy passenger vehicles sales hit 5.16mn in 2020, up by 17pc from 2019, of which sales of plug-in hybrid, pure electric, and fuel-cell vehicles were 2.86mn units, up by 36pc, according to China’s Federation of Passenger Transport Association data. China’s share of electric passenger vehicles (EV) sales in 2020 dropped to 41pc with Europe surpassing China with 43pc share.
China’s passenger vehicle makers are challenged with overcapacity issues. Small companies with fewer sales are fraught with severe overcapacity. The total built-up capacity of passenger vehicles in China among 122 automakers was 41.532mn as of Dec 31, 2020, 9.88mn vehicles capacity is under construction. Of these 122 auto manufacturers, 47 have an average capacity utilization rate of 7.53pc, indicating severe overcapacity. Six companies, which are joint ventures with Japanese automakers operated at 125pc capacity utilization rate, while 22 companies operated in the range of 86.08pc to 52.01pc.
With the addition of new energy vehicle capacity and decrease of sales of traditional automakers, the overall passenger vehicle capacity utilization in China dropped to 48.45pc in 2020 from 66.55pc in 2017.
In 2020, the passenger vehicles sales of domestic manufacturers are expected to be 201,223,700 units, down by 6.2pc from a year ago. Sales dropped by 18.52pc from 2017, following successive years of negative growth in 2018, 2019, 2020.