Greater China sales
June 2022: +29.7%; 2.37 million units vs. 1.83 million
units
YTD 2022: -4.8%; 11.2 million units vs. 11.8 million
units
- In June 2022, 2.37 million light vehicles were sold in Greater
China, a 29.7% increase compared with the same month of 2021.
Specifically, light vehicle sales in mainland China increased
29.7%, from 1.8 million units in June 2021 to 2.33 million units.
Passenger vehicles recorded sales of 2.06 million units, a 37.9%
increase year on year (y/y), while light commercial vehicle (LCV)
sales contracted 11.2% y/y, to 0.27 million units. The rapid growth
of passenger vehicle sales in June was helped by newly introduced
purchases tax incentives and eased pandemic-related restrictions in
Shanghai and Jilin provinces.
- On a year-to-date (YTD) basis, light vehicle sales in mainland
China decreased 4.7%, from 11.55 million units to 11.01 million
units. Precisely, passenger vehicle sales decreased 0.4% y/y, to
9.57 million units, while LCV sales decreased 26% y/y, to 1.43
million units. Segment-wise, YTD sedan sales increased 2% y/y, from
4.72 million units to 4.81 million units, and the sport utility
vehicle (SUV) segment decreased 2.3% y/y, from 4.54 million units
to 4.44 million units. YTD sales of multipurpose vehicles (MPVs)
decreased 10.8% y/y, to 0.33 million units.
- In the first half of 2022, passenger vehicle sales of domestic
OEMs increased 14.7% y/y, to 4.02 million units. The YTD market
share went up from 36.4% to 42%. The growth was driven by robust
new-energy vehicle (NEV) sales, led by BYD and startups from
mainland China, such as Xpeng and Neta.
- In response to the COVID-19 outbreak’s impact on the economy,
the mainland Chinese government ramped up stimulus in late May. On
20 May, the mainland Chinese central bank cut the five-year loan
prime rate (LPR) that benchmarks the mainland Chinese mortgage
interest rates by 15 basis points, the second cut in five months.
On 24 May, the central government unveiled a 33-point stimulus
package, including a CNY60-billion cut on passenger vehicle
purchase taxes and a relief of CNY90 billion for extended
repayments of commercial vehicle loans. Meanwhile, business
activity rebounded in both manufacturing and services in June, as
COVID-19 containment measures were partially relaxed. While
manufacturers reported steeper rates of expansion, enjoying the
second-largest increase in production since the start of 2011,
service providers also reported a marked improvement, with output
growing at the strongest rate since July 2021.
- In the latest update, the light vehicle sales forecast for
mainland China was revised up to reflect the fast recovery helped
by stimulus policies. Light vehicle sales in 2022 are expected to
increase 3.8% y/y to 24.8 million units, of which passenger
vehicles are estimated to increase 5.5% y/y to 21.32 million units,
while LCVs are forecast to decline 5.4% to 3.49 million units.
Greater China production
June 2022: +29.9%; 2.37 million units vs. 1.82 million
units
YTD 2022: +0.6%; 11.71 million units vs. 11.65 million
units
- Greater China’s light vehicle production in June recorded 2.37
million units, with a 29.9% increase year on year (y/y). In
mainland China, light vehicle production increased 30.3% y/y, to
2.35 million units, which ended three consecutive months of
decline. Light vehicle production in mainland China has shown a
significant rebound after the massive lockdown measures were lifted
in Shanghai and Jilin provinces. Meanwhile, in order to stimulate
latent demand, the central government has rolled out a new round of
tax incentive, which could be another positive factor for
carmakers. Some carmakers—especially state-owned manufacturers,
such as SAIC and FAW Group—might also need to offset the losses
in April and May as soon as possible to support the local
governments to fulfill the half-year economy target.
- The light vehicle production forecast for Greater China for
full-year 2022 whole year is set at 24.92 million units, with a
0.3% y/y increase. In mainland China, light vehicle production will
likely be 24.68 million units, marking a 0.4% increase y/y. The
increase mainly comes from the tax incentives and the increase in
production of pure electric vehicles, while the chip shortage
crisis could be the persistent challenge that carmakers need to
face in 2022. In comparison with the June forecast, an additional
400,000 units have been added to the forecast.
- The latest vehicle inventory alert (VIA) index, issued by China
Automobile Dealers Association (CADA), stood at 49.5%—a
decrease of 7.3% month on month (m/m) and 6.6% lower than in the
same period of 2021—first time below the threshold. Meanwhile,
the dealership inventory index fell to 1.36, which indicated an
average supply of 41 available sales days. It was four days lower
than the safe level. The main reason was the strict containment
measure that has disrupted logistics and production.
- In June, production of passenger vehicles in Greater China
sharply rose 39.8% y/y, to 2.13 million units. Market segment-wise,
car production stood at 1.05 million units, with a 41.4% y/y
increase. Production of multipurpose vehicles (MPVs) rose 10.3%
y/y, to 59,855 units. Production of sport utility vehicles (SUVs)
increased 40.7% y/y, to 1.02 million units. Each sector strongly
rebounded. The pace of production at large state-owned enterprises,
which was affected by the pandemic, quickly recovered in June. For
example, Shanghai-based SAIC Group achieved a 63% increase y/y in
June, largely benefitting by the recovery of its joint venture (JV)
partner SVW, which almost doubled to 1.3 million units y/y. FAW
group, which is located at Changchun, outperformed others with a
52% increase y/y, mainly contributed by two major JVs—FAW-VW
(77% y/y) and FAW-Toyota (63% y/y)—both of which were out of
operation during the outbreak from March to May. The other driver
was the growing NEV market that achieved an increase of 141% y/y,
with 571,000 units in June, according to China Passenger Car
Association (CPCA). Despite the April-May lockdown in Shanghai,
Tesla still built nearly 70,000 units with a 123% increase y/y in
June. BYD, the biggest local carmaker from mainland China, recorded
a 176% increase y/y, with 140,000 units, and remained second place
below FAW-VW in June.
- In June, light commercial vehicle (LCV) production in Greater
China posted 0.24 million units, a decrease of 20.7% y/y. Market
segment-wise, production of chassis-cabs stood at 0.13 million
units, marking a decrease of 23.0% y/y. Production of vans stood at
67,504 units, with a 23.4% decrease y/y. Pickups fell 5.3% y/y, to
38,861 units. Influenced by macroeconomic downward pressure and the
effect of policy-driven pre-purchases in the past two years,
commercial vehicles are expected to experience a slowdown
throughout 2022.
This article was published by S&P Global Mobility and not by S&P Global Ratings, which is a separately managed division of S&P Global.