BYD’s sales in China are up almost 69% this year, giving it an 11% share of the overall car market, more than the Volkswagen brand or the Toyota brand, according to an analysis of sales data. — Reuters
SHANGHAI: China’s auto market, the world’s largest, is accelerating towards an electric future, leaving established global brands stuck in the slow lane.
Auto executives, in Shanghai for this week’s auto show, are returning to a sharply different market from the one they left in 2021, when the industry gathered for a limited event under strict Covid-19 controls.
The biggest change is that China-made brands now lead in key segments, and their rise has been powered by new electric-drive models that are gaining share at home and overseas.
The biggest winner has been BYD, which will use the Shanghai show to unveil a new hatchback electric vehicle (EV) for value-seeking buyers and a pricier EV styled as a sport-utility vehicle (SUV).
BYD’s sales in China are up almost 69% this year, giving it an 11% share of the overall car market, more than the Volkswagen brand or the Toyota brand, according to an analysis of sales data.
“The stratification of this market into clear winners and losers is becoming clear,” Bill Russo, founder of consultancy Automobility, said in a note issued yesterday. “And there are very few winners and a whole lot of losers.”
China’s passenger car sales were down 13% in the first quarter, according to data from the China Passenger Car Association.
But sales of EVs and plug-in hybrids, an area where Chinese automakers led by BYD now dominate, were up 22%. Sales of internal-combustion vehicles were down by an almost equal margin.
The result has been a double whammy for the likes of Volkswagen, General Motors, Honda and Nissan. Sales are down, and so is market share.
Tesla has been cutting prices on EVs since January in a price war that has supported sales of EVs and plug-in hybrid electric vehicles, both of which are classed as “new energy vehicles” in China. It has also cut into industry-wide profitability, analysts say.
For years, China’s entry-level market for passenger cars was dominated by combustion-engine cars made by global automakers in partnership with Chinese brands.
But for cars priced between US$22,500 (RM99.821) and US$30,000 (RM133,095), this year has been a wipeout for petrol-only vehicles. Sales were down 20.5% in the first quarter, compared to a 68% gain for EVs and plug-in hybrids.
BYD’s Song plug-in hybrid SUV, with a starting price of about US$20,000 (RM88,730), outsold the Nissan Sylphy, which had been China’s top-selling car for three straight years.
BYD’s Dolphin EV, which starts at about US$17,000 (RM75,420), was ahead of the Volkswagen Passat.
Because of the cost pressure on EV battery materials, the entry-level market is likely to be “the final bastion” for petrol-only vehicles in China, Xu Haidong, deputy chief engineer at the China Association of Automobile Manufacturers, said.
In China’s premium market, with prices between about US$52,500 (RM232,916) and US$60,000 (RM266,190), electric-drive cars are already the best sellers.
BYD dominates China’s market for plug-in hybrids, cars that have a combustion engine but are capable of being charged and running for shorter distances on electric power.
Plug-ins represent more than half of BYD sales this year, giving the company scale to compete on price across its line-up, analysts say. — Reuters
