Markets slump for three years amid chip shortages and Covid-19 disruptions
Helping drive growth in China was strong sales of electric and plug-in hybrid cars, which accounted for 15% of total passenger-car sales last year. The association said sales of these new-energy vehicles more than doubled to 2.99 million vehicles. Chinese brands like XPeng Inc.
and nio Inc.,
with tesla Inc.,
Last year there were record sales.
For 2022, China’s passenger-car market is expected to grow by 5%, with new-energy cars accounting for a quarter of total sales, the association forecast. Analysts also expect the market to expand, though some expect the pace to be slow.
Any growth is likely to come from electric-car sales, with analysts and industry executives expecting sales of internal-combustion-engine cars to remain flat or decline slightly this year.
Analysts say the risks hanging on the market include economic slowdown and pandemic. The world’s second-largest economy has slowed in recent months amid a sluggish recovery in consumption and a prolonged asset slump.
China’s premier Paul Gong said, “The continued contraction in demand due to the overall economic slowdown and epidemic control, coupled with the recovery of production as chip shortages, shifted China’s car market from over-supply to last year’s demand.” will do it.” Auto Research at UBS.
Mr. Gong said rising costs of raw materials, especially those used in electric-vehicle batteries such as lithium and cobalt, are likely to dominate the industry.
The car market has been feeling the pain in recent months. The association’s data shows that October-December sales declined by 11% compared to the same period last year.
In 2021, some foreign auto makers suffered more than others, primarily due to global semiconductor shortages and other component-supply problems.
China’s largest foreign brand, said its conglomerate sales in the country fell nearly 14% last year to 3.3 million vehicles, hit by a global chip shortage. nissan motor Co.
sales fell 5.2%, and Honda Motor Co.
4% is down.
“It’s really a complex system of constraints that are changing more or less on a weekly basis,” said Volkswagen’s China chief executive of the automaker’s production plans, Stephan Wollenstein.
German automakers have also been hit recently by a relatively small outbreak of Covid-19 in China, closing plants in Tianjin and Ningbo, Mr Wollenstein said at a media briefing on Tuesday.
Mr Wollenstein said it aims to increase China’s sales by about 15% in 2022 if the component-supply situation improves.
Meanwhile, Toyota Motor Corporation
, which has navigated supply-chain constraints better than some rivals in both China and the US, said its sales in China grew 8.2% in 2021.
China’s major domestic EV makers sold a record number of cars last year. BYD Co.
said it sold about 600,000 new energy passenger cars in 2021. XPeng, NIO and Li Auto Inc.
All delivered over 90,000 vehicles each last year.
US electric-vehicle maker Tesla sold more than 470,000 cars at its Shanghai factory last year, about a third of which were exported, data from the association showed. Tesla said last week that it would deliver more than 936,000 vehicles globally in 2021.
China’s subsidy program for electric-car buyers is set to end before the start of 2023. This year, Beijing, which has already been cutting subsidies in recent years, cut them by 30% from last year to about $2,000 or less.
Analysts believe that the end of the policy will have a limited impact on sales of electric vehicles. “The new energy vehicle market in China has evolved to be driven by a demand for one driven by policies and subsidies,” said Jing Yang, research director at Fitch Ratings.
—Raphael Huang contributed to this article.
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