BEIJING, May 11 (Reuters) – China’s domestic car sales fell for a seventh straight month in April amid intense competition in the world’s biggest auto market but exports stayed strong as automakers increasingly targeted overseas markets.
Sales at home dropped 21.6% from a year earlier to 1.4 million vehicles last month, data from the China Passenger Car Association (CPCA) said on Monday.
Combustion engine car sales missed expectations due to high oil prices and demand for plug-in hybrids was also sluggish, said Cui Dongshu, the CPCA’s secretary-general.
Electric vehicle and plug-in hybrid sales, accounting for 60.6% of the total, slid 6.8%, extending a losing streak to four months.
In contrast, EV and plug-in hybrid vehicle exports shot up 111.8% from a year earlier, outpacing an 80.2% increase in overall car exports, as rising global fuel prices triggered by the U.S.-Israeli war on Iran bolstered EV demand in overseas markets.
The widening gap between domestic weakness and export strength is evident at BYD,, the world’s largest EV maker. Its sales downturn globally stretched to an eighth month in April despite persistent strength in overseas shipments.
Last month, Morgan Stanley maintained its expectation that China’s domestic and export car sales would fall 2% this year, but raised its export growth estimate to 33% from 15%. It also expects the decline in domestic sales to deepen to 11% from an earlier projection of 6%.
Chinese automakers are increasingly shifting away from budget vehicles priced under 150,000 yuan ($22,050.72) toward larger, feature-rich vehicles. A wave of premium SUVs unveiled at the Beijing auto show last month underscores the move upmarket, a boost for premium brands such as Nio and Geely’s Zeekr.
But robust growth in premium EVs and PHEVs, now dominated by domestic brands, has not been enough to offset the overall downturn. Weak demand for affordable cars, which account for a sizable share of new car sales, remains a drag on the sector.
Sluggish sales in the entry-level segment become a “key bottleneck” holding back the sector’s recovery, said Cui at CPCA.
He suggested China adopt standards for mini vehicles akin to Japan’s so-called “kei car” category to create a regulated, low-cost segment that caters to elderly and rural consumers, unlocking suppressed demand and boosting entry-level sales.
($1 = 6.8025 Chinese yuan renminbi)
(Reporting by Qiaoyi Li, Zhang Yan and Ju-min Park; Editing by Himani Sarkar, Thomas Derpinghaus and Muralikumar Anantharaman)
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