China Car Exports Rose 73.7 Percent Amid Domestic Decline

China reported a significant acceleration in automobile exports for March, underscoring the growing importance of international markets for its competitive automotive industry. Despite shipping disruptions caused by the crisis in the Middle East, exports surged 73.7% year-on-year to nearly 700,000 vehicles. This growth rate represents a sharp increase from the 54.1% rise observed during the first two months of the year, according to data from the China Passenger Car Association (CPCA). Cui Dongshu, the secretary-general of the association, noted the unexpected strength of the sector.

Car exports have entered a stage of super high growth, beating our expectations.

While international demand remains strong, the domestic market faces persistent headwinds. Home sales dropped 15.2% from a year earlier to 1.67 million units, marking the sixth straight month of decline. Rising fuel prices and the reduction of purchase incentives have dampened consumer interest in both traditional and electric models amidst a broader economic slowdown.

Sales of internal combustion engine vehicles fell by 15.7% in March, accelerating from a 13.4% drop in the preceding two months. Although the government has capped domestic fuel price hikes to soften the impact of global oil volatility, dealerships are struggling with bloated inventories. Consumers have shown less enthusiasm for new electric vehicles (EVs) following the end of certain tax exemptions. Industry leader BYD CO LTD -A recorded its seventh consecutive monthly sales decline in the domestic market, where combined sales of EVs and plug-in hybrids fell 14.4% year-on-year. Despite these local challenges, the company continues to see robust growth in overseas regions such as Europe. Company executives remain optimistic about their international trajectory, maintaining a target of selling more than 1.5 million vehicles outside of their home market this year.