China’s automobile sales in October fell for the first time in more than a year due to the phasing out of the car switching incentive system promoted by local governments, further strengthening the long-term factor. … Affects demand.
Retail sales of passenger cars, including sedans, SUVs and minivans, fell 0.8% year-on-year, according to data from the China Passenger Car Association (PCA). Excluding the drop in January due to the Chinese New Year holiday, this is the first negative figure since August 2024.
According to PCA statistics, cumulative sales increased by 8.3% in the first 10 months of this year. However, the end of local subsidies for vehicle modifications threatens to slow the pace of the market.
Large provinces and cities such as Shanghai have cut or eliminated incentives that give thousands of yuan to people who scrap old cars. As of October 22, more than 10 million applications have been submitted to benefit from these programs.
Adding to the disappearance of this aid are structural problems such as overcapacity and a prolonged price war that continues to squeeze manufacturers’ margins. While the Chinese government is trying to contain that intense competition, brands now face the challenge of meeting annual sales targets without one of the main drivers of demand.
According to PCA General Secretary Choi Dong-soo, the long Golden Week holiday in October also contributed to the monthly decline. Nevertheless, the cumulative growth rate of 8.3% so far this year suggests that China’s auto market has maintained a solid level of activity despite increasing signs of slowing.
The sales decline is the next in a series of bad news for BYD, Asia’s largest manufacturer. The company posted its second straight quarterly decline after the Chinese government took action against aggressive discounting, one of the most commonly used tools in commercial strategy.
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