China passenger vehicle sales growth decelerates in May 2021 but electric vehicle sales remain strong, says GlobalData

Following the news that China’s passenger vehicle sales grew by only 1.1% year-on-year (Y-o-Y) in May 2021, as per the data from China Passenger Vehicle Association;

Bakar Sadik Agwan, Senior Automotive Consulting Analyst at GlobalData, a leading data and analytics company, offers his view:

“Relatively slow growth in passenger vehicle sales in China can be attributed to supply chain disruptions and production interruptions caused by the global chip shortages. Passenger vehicle sales decelerated in May 2021 with a mere 1.1% growth on a Y-o-Y basis and 0.8% growth on a month-on-month (M-o-M) basis. Comparatively, April stood stronger with to 8.6% Y-o-Y growth when compared to 2020. However, there has been an increased consumer traction towards electric vehicles (EVs) which is a positive development in the China passenger vehicles market.

“Some OEMs including Nissan and Honda witnessed decline in volume, sales were down 14.6% and 4.1% Y-o-Y, respectively. Toyota stood resilient with 1.5% Y-o-Y growth in May. While the strong economic resilience is supporting the automotive sales in China and monthly volumes have revived to pre-COVID-19 levels chip shortages and drop in consumer confidence index has slightly impacted the sales. However, the impact is expected to be short-lived and will be washed away by strong economy.

“New EV sales surged 177% Y-o-Y in May with 185,000 vehicles sold. SAIC-GM-Wuling Automobile Co. remained top EV player in term of sales, followed by BYD and Tesla. Due to the conducive EV policies and lucrative incentives the market is on a constant upsurge and is foreseen to continue growing at a robust pace in near-to-mid-term.

“Overall, ICE vehicle sales look to follow steady growth over the year and the EV market would remain dynamic. GlobalData’s latest base sales scenario forecast expected light vehicle sales in China to grow by 9.5% in 2021 over previous year. China Passenger Car Association has also revised its EV sales forecast from 2.2 million to 2.4 million units in 2021. Entry of new automotive companies and unconventional players such as Baidu, Xiaomi and Huawei will intensify the automotive race in China but will help the country to inch closer towards its EV sales target of 20% by 2025.”

More Media