BEIJING/SHANGHAI, May 9 (Reuters) – Sales of passenger vehicles in China rose 2.1 percent in April from the previous month, industry data showed, underscoring a faster pace of growth slow as the stimulus effect of price cuts and incentives faded.
Auto sales in April totaled 1.65 million units, up 54.5 percent from a year earlier, when COVID-19 lockdowns disrupted production and sales, it said China Passenger Car Association (CPCA) on Tuesday.
In the first four months of 2023, vehicle sales fell 1.4 percent year-on-year to 5.98 million units, it added.
Sales of new energy vehicles (NEVs), which include pure battery electric cars and plug-in hybrids, slipped 3.6% month-on-month in April and accounted for 32% of total car sales for the month , according to CPCA data.
BYD Co Ltd (002594.SZ) topped the segment with a 37% market share, while Tesla Inc (TSLA.O) had a 7.6% share.
China’s auto market is becoming even more congested with nearly 300 models on display at the Shanghai Auto Show in April, 172 of which were NEVs, according to Ways Consulting.
After more than 40 car brands joined a Tesla-initiated price war this year and cut prices on their best-selling models, more consumers are choosing to delay purchases in anticipation of deeper discounts on cars, he said CPCA in previous notes.
The US electric vehicle giant has since reversed course, raising prices in markets including China in May.
Tesla’s price hike would help move consumers away from a wait-and-see sentiment, thereby stabilizing the overall market, Cui Dongshu, secretary general of CPCA, said at a media conference on Tuesday.
China’s economic recovery after COVID-19 has mostly benefited spending on services such as restaurants and travel, while sales of major items such as cars and smartphones have continued to fall.
A tepid recovery in the housing market and an unexpected contraction in factory activity also point to a shaky economic outlook, clouding the strength of the post-Covid recovery and potentially reducing consumer spending.
Reporting by Qiaoyi Li, Zhang Yan and Brenda Goh; Editing by Jamie Freed
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