2018 China market: 28.081M units for new car sales, 23.71M units for passenger cars

Sales of Japan and German brands steady, NEV sales increased 62% y/y

2019/02/22

Summary
Sales of passenger cars in 2018 decreased by 4.1% y/y, and the sales of commercial vehicles increased by 5.1% y/y
Sales volume by group：SAIC Group’s market share is 25% and Changan Automobile Group falls to fifth place
Passenger car market: With the exception of Geely and GAC the sales volumes of China OEMs decreased, sales volumes of German and Japanese OEMs were stable, and sales volumes of U.S. OEMs fell sharply
Vehicle type: Sales of SUVs decreased by 258,000 units, and commercial vehicles increased y/y
NEV sales in 2018 increased 62% y/y to 1.256 million units, emerging EV manufacturers and foreign capital joint venture launched NEVs one after another
Exports increased for the 2nd consecutive year, imports decreased by 6.8%
Vehicle sales by major Chinese group（factory shipments）

Summary

Full year 2018 new car sales in the China market decreased by 2.8% y/y to 28.081 million units (based on factory shipment volumes, including exports) for the first year in 28 years. According to the China Association of Automobile Manufacturers (CAAM), automotive industry sales in 2018 were stable overall, with production and sales volumes lower than planned at the beginning of the year due to policy and macroeconomic influences, but the production and sales of New Energy Vehicles (NEV) continued to rise sharply, with a slight increase in exports. Sales of passenger cars in all months of the second half (July - December) of the year decreased from the same period y/y. Although the number of buses and semi-trailers sold decreased, sales of commercial vehicles increased by 5.1% y/y to 4.371 million units due to the strong sales of trucks.

By Chinese OEM group, sales volumes of the top five groups (FAW, Dongfeng, FAW, BAIC, and Changan) decreased by 1.012 million units in the previous year to 1.876 million units. Changan Automobile Group was ranked fifth and the BAIC Group moved up to fourth place due to strong sales of NEVs. Geely was ranked seventh, with sales increasing by 21% y/y, reaching 1.698million units.

In the passenger car market, sales of all China automakers, with the exception of Geely and GAC, decreased. German automaker sales increased by 4.7% y/y to 5.083 million units, while sales of Japanese-affiliated automakers increased by 3.6% to 4.645 million units, reflecting a y/y increase. U.S. automaker sales fell by 18.7% to 2.473 million units. In particular, Ford’s sales fell sharply, decreasing by 50% from its 800,000 units in 2017 to roughly 400,000 units in 2018. The sales of Korean automakers recovered nicely from the sharp decline in 2017 to 1.181 million units, reflecting a 3.2% y/y increase.

The factors behind the decline in unit sales in 2018 include the impact of the U.S.-China trade war and the rush in demand by consumers prior to the end of 2017, before the small passenger car tax rebate policy was eliminated. Meanwhile, the sale of NEVs in 2018 increased by 62% to 1.256 million units from the previous year. Of the 1.256 million NEVs sold, 1.053 million units were NEV passenger cars and 202,000 units were NEV commercial vehicles. Overall, BYD continues to lead in the NEV market. From January 1, 2018, the Chinese government has extended the tax rebate on purchases of NEVs, which exempts NEV models if they meet the technical requirements established by the government for NEVs, namely electric, plug-in gasoline-electric hybrid, and fuel-cell vehicles.

China's automobile export volumes in 2018 increased by 16.8% to 1.041 million units, which was substantially higher than the previous year. Meanwhile, import volumes decreased by 8.4% y/y to 1.136 million units due to the impact of the U.S.-China trade war.

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