China’s passenger car market is expected to grow to zero in 2023…Gasoline vehicles may be weeded out by the introduction of 100 new energy vehicles

In 2023, the Chinese automobile market is likely to reach a plateau even as the shift to EVs accelerates.

China’s zero-corona policy, which aims to thoroughly contain the spread of infection even at the expense of the economy, has dealt a blow to the automobile market in 2022. Against the backdrop of recent price hikes and an economic slowdown, industry groups have announced that the passenger car market will drop to zero growth in 2023, raising caution. Even in the field of new energy vehicles, which has a lot of room for growth, about 100 new vehicle models will be launched in 2023, significantly exceeding the number of this year, and the shakeout of manufacturers is likely to proceed.

Passenger car sales down 9.2% in November

In December, the Chinese government decided to ease its zero-corona policy, which had been in place for nearly three years. Since October, the infection has spread in several large cities such as Guangzhou, Chongqing, and Beijing, and in Zhengzhou, the world’s largest iPhone production base, the factory of Hon Hai Precision Industry (Foxconn) has closed against the backdrop of the turmoil of the corona crisis. A large number of seasonal workers who worked in the country left the country, and protests were frequent.

The car market also stalled as a result of the nationwide turmoil. According to the China Passenger Car Market Information Conference (CPCA), passenger car sales in November decreased by 9.2% year-on-year to 1,649,000 units. The biggest reason for the slump was that retailers in big cities were restricted due to the zero-coronavirus policy, making it difficult for consumers to go out.

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Even if the zero-coronavirus policy is relaxed, the auto market in 2023 will continue to be tough.

Sales from January to November increased by 1.8% (317,000 units) to 18,367,000 units. In response to the deterioration of the economic environment due to the lockdown in Shanghai, the Chinese government announced in June that it will target passenger cars with a price of 300,000 yuan or less (approximately 6 million yen, converted to 1 yuan = 20 yen) and an engine displacement of 2.0 liters or less. Introduced a policy to halve the automobile acquisition tax. The CPCA revised its 2022 passenger car sales forecast upward from 19 million units to 21 million units in anticipation of the effects of this policy, but the brakes were applied again in November.

Source: BusinessInsider

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