Volkswagen, Nissan and Hyundai on track for worst China sales in years

Volkswagen’s ID.7 is set for release in Europe and China in the fall of 2023, and in North America in 2024.

CNBC | Evelyn Cheng

BEIJING — Chinese brands are taking the lead in the country’s rapid shift to new energy vehicles, putting Volkswagen on track for its smallest year of China sales since 2012, according to CNBC analysis of public data for the first three quarters of the year.

The German auto giant isn’t alone in its struggles, according to CNBC’s analysis of 10 global car brands.

Nissan is on track for its worst year in the market since 2009, while Hyundai is set for its lowest sales since at least that time, CNBC’s analysis showed.

The declines come as China has rapidly transitioned away from internal combustion engines to new energy vehicles. It’s a rapidly growing market of battery and hybrid-powered cars which Tesla and homegrown brands such as BYD have captured.

In China, the world’s largest auto market, new energy vehicles have accounted for more than one-third of new passenger cars sold in the country so far this year.

That’s according to the China Passenger Car Association, which also predicts the local auto market will grow by 20% in November from a year ago.

While Volkswagen remains by far a giant in China’s car market with around 3 million vehicles sold a year, the German brand hasn’t gained much traction in the electric car space. In July, the company opted to invest about $700 million into Chinese electric car start-up Xpeng to jointly develop two cars for China.

BYD is quickly catching up. The Shenzhen-based company sold more than 1 million cars for the first time in 2022 and is on track for 2.5 million vehicle sales in China this year, CNBC found.

Toyota, which has struggled in the market transition to electric cars, is set for its worst year of overall China sales since 2020 with about 1.8 million vehicle sales, CNBC found.

The Chinese automotive industry is developing faster than the market’s growth rate, said Alvin Liu, an analyst at Canalys’ Shanghai office, responsible for global tracking and analysis of the new energy vehicle market.

He pointed out that at around 2 or 3 million in sales, BYD is set to capture a significant share of China’s 8.5 million-large new energy vehicle market. Liu also noted the potential for original equipment manufacturers, or OEMs, to compete via joint ventures with Chinese companies.

Foreign brands are becoming less popular with Chinese consumers as they consider electric cars. License plate restrictions in big cities such as Beijing incentivize locals to buy electric instead of traditional fuel-powered cars.

A Bernstein survey of more than 1,500 consumers in China in August and September found that BYD was the top brand that Chinese buyers of electric vehicles would consider. Tesla was next, followed by Nio.

When it came to preferences for the next car purchase, “except for Tesla, all foreign brands saw their brand traction scores declined year-on-year, of which Japanese brands’ (e.g. Toyota, Honda, Nissan) dropped most,” the report said.

“The younger population also saw declining interest in traditional non-German premium brands, and to a smaller degree, in German premium brands,” the report said.

The survey indicated some brand loyalty for German car brands. But not necessarily when it came to different sources of energy.

“Tesla is more attractive to current German and other premium brands’ owners as they make their switch to EVs,” the Bernstein report said.

Tough competition

Entering the global market


Read original article here

Denial of responsibility! Swift Telecast is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – The content will be deleted within 24 hours.

Leave a Comment