BEIJING/SHANGHAI, Jul 10 (Reuters) – China’s passenger car sales fell in June, data from the China Passenger Car Association (CPCA) showed on Monday, as a sluggish economic recovery led to increased consumer caution over to large expenses.
June car sales totaled 1.91 million units, down 2.9% from last year, CPCA data showed. It was the first monthly contraction since January. However, sales increased 2.5% to 9.65 million units in the first half of the year.
Meanwhile, sales of new energy vehicles (NEVs), including battery-powered all-electric cars and plug-in hybrids, rose more than 25% in June, accounting for about 35% of total car sales. NEV sales increased more than 37% in the first six months to 3.09 million units.
Both Tesla (TSLA.O) and rival BYD (002594.SZ) delivered record deliveries of their Chinese-made vehicles in the second quarter, despite an uncertain recovery for the industry.
Chinese automakers relied more on overseas markets to sustain sales growth, with auto exports rising 56% in June.
However, Tesla’s share of China’s pure electric and plug-in hybrid car market fell from 10.5% in the first three months to 8.8% in the second quarter, according to a Reuters calculation based on CPCA figures. .
With domestic consumer demand weak, the world’s largest auto market is grappling with a price war sparked by Tesla in January that has since spread to more than 40 brands offering discounts on their vehicles.
While the price cuts initially boosted sales, the market’s recovery lost momentum, prompting authorities to roll out more buyer incentives, including tax breaks for electric cars.
Two days after organizing an industry-wide pledge to avoid “abnormal pricing,” the China Association of Automobile Manufacturers (CAAM) backed down on Saturday, citing antitrust laws.
The joint pledge of 16 automakers, including Tesla, BYD, Nio, Li Auto and Xpeng, was interpreted by some as a sign of a truce in a price war crippling the industry’s revenues.
Reporting by Qiaoyi Li, Zhang Yan and Brenda Goh; Edited by Dhanya Ann Thoppil, Robert Birsel
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