China’s passenger car exports in the first eight months of this year already surpassed last year’s total, an industry association said Thursday, though domestic sales continued to decline.
Passenger car exports in August jumped 67.1% from the year before to around 890,000 units, driven by plug-in hybrids and pure electric vehicles, according to the China Association of Automobile Manufacturers (CAAM).
China exported more than 6.2 million passenger vehicles in January-August. Exports of all types of vehicles totaled 7.1 million last year, CAAM data show, including about 6 million passenger vehicles.
The world’s largest car exporter is on track to achieve 50% to 70% growth in full-year passenger vehicle exports, according to S&P Global Ratings.
At home, passenger car sales fell 25.6% year-on-year in August to just below 1.5 million vehicles.
China’s domestic car market is under pressure from intense competition and price wars, while the slowing economy has undermined consumer confidence.
China’s car exports have been stronger than expected so far this year, helped by competitive pricing and quality, said Stephen Chan, an associate director at S&P Global Ratings.
“It’s likely that strong export growth will largely mitigate the domestic weakness,” he said.
Over the past few months the energy shock from the Iran war and rising fuel prices have led more drivers of gasoline and diesel-powered vehicles to shift to EVs.
Hefty tariffs have in effect kept most Chinese-made passenger cars out of the U.S. market. But China has been exporting and selling more of its vehicles to Europe, Latin America, Africa and Southeast Asia.
Chinese automakers are also setting up more factories overseas.
Weak domestic demand is increasing carmakers’ incentives to redirect capacity overseas, analysts at Morgan Stanley said in a recent research note, and Chinese carmakers are increasingly moving beyond vehicle exports toward local assembly and manufacturing to ease impacts from trade barriers and reduce logistics costs.