By Michael Elkins
The China Passenger Car Association (CPCA) released data Monday showing growth in vehicle sales was flat in March compared to a year earlier. According to the CPCA, car sales in March were 1.61 million units. In the first three months, sales had fallen 13.4% to 4.33M units.
Sales of new energy vehicles (NEVs), which include pure battery electric cars and plug-in hybrids, rose 21.9% in March and accounted for 34% of the month's sales, the data showed.
BYD (OTC:BYDDY) led the segment with market share of 35.5%, while Tesla (NASDAQ:TSLA) accounted for 14%.
There is no doubt that April will see a good recovery in sales growth, Cui Dongshu, the association's secretary general, told reporters, citing a low base in the corresponding period last year. China imposed strict COVID-19 lockdowns in major cities, such as its commercial hub of Shanghai, in April 2022.
Discounts and falling battery costs have contributed to lower NEV pricing, placing pressure on internal combustion engine (ICE) vehicles and the legacy brands behind them.
More than 40 brands have joined a price war started by Tesla this year, among them Nissan (OTC:NSANY), Toyota (NYSE:TM) and Volkswagen (ETR:VOWG_p), which have started offering aggressive discounts on their best-selling ICE models to defend market share.
Local authorities, who see the auto industry as a pillar of the economy, have also been rolling out buyer subsidies to drive demand and some of these programs have started to extend to automakers, to spur manufacturing.
Shares of TSLA and TM are down 0.75% and 1.04% respectively in afternoon trading on Monday.
Shares of NIO and LI are also down 0.22% and 0.51% respectively.