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May 10, 2023
Chinese Light Vehicle wholesales up 8% to 2.38 m units in March

New Delhi: The Chinese Light Vehicle (LV) market rebounded in March.LV wholesales jumped to 2.38 million units, marking an increase of 8%year-on-year (YoY), according to a report by LMC Automotive, a global data company. On the production side, the total LV figure in March stood at 2.45 million units, which is an increase of 15% YoY. For the first quarter of 2023, LV production moved down by 4% YoY. At a component level, passenger vehicle (PV) wholesales achieved a total of 2.06 million units, an increase of 10% YoY, according to the same Report.

At the vehicle type level, PV production in March increased by 15% YoY while cumulative PV production till March decreased by 4% YoY. Light Commercial Vehicle (LCV) wholesales grew to 3,22,000 units, with a marginal uptick of just 1% YoY. Neither production nor sales experienced positive growth in the first quarter of 2023. The March selling rate reached a 5-month high of 26.3 million units per year, which moved nearly 26% upward from February. This also brought down the YTD average selling rate to 23.6 million units per year. In YoY terms, wholesales increased by 8.6% in March, but declined by 6.7% in Q1 2023.

According to the report, termination of the temporary purchase tax cut on ICE PV. models and the decade-old New Energy Vehicles (NEV) subsidy program in 2022 affected the growth in numbers.

With the decline in sales, OEMs are cutting vehicle prices and provincial governments are rushing to offer subsidies. Following big price cuts by Tesla, the price war has spread beyond Battery Electric Vehicles(BEVs) to Internal Combustion Engine (ICE) models. To stimulate ales sustainably , local Industry associations and dealers have requested the central government to re-introduce a national level subsidy program.

As a result of this many consumers now have taken the back seat with the hope of cut in prices from OEMs. However, the report expects the implementation of State VI B emission which will be drawn around July will spike the sales in Q2 2023. The electrification of the Chinese market continues to accelerate. At the Shanghai Auto Show, held in April 23,over 80% of the new models displayed were NEV.

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