BEIJING (Reuters) -China’s car sales fell 6.9% in June from a year earlier, dropping for a third straight month as government incentives failed to spur consumer demand in a sputtering economic recovery.
Passenger vehicle sales totalled 1.78 million, with the pace of decline picking up from a 2.2% drop in May and a 5.8% fall in April, China Passenger Car Association (CPCA) data showed on Monday.
A price war since 2023 helped to lift Chinese vehicle sales earlier in the year but is having less effect in recent months despite fresh government subsidies for trading in cars, which were announced in April.
For the first half of the year, China’s car sales were up 2.9% at 9.93 million vehicles.
June sales of so-called new energy vehicles (NEVs) including pure electric vehicles (EVs) and plug-in hybrids accounted for a record 48.1% of domestic car sales.
Chinese EV giant BYD and relative newcomers such as Nio, Zeekr and Leapmotor all logged record monthly sales.
Overall growth in EV sales cooled to 9.9% from 27.4% in May while sales of plug-in hybrids jumped 67.2%, up from a 61.1% increase the previous month.
June car exports were up 28% year on year, against a 23% gain in May, according to separate data from the association.
The trend for exports could weaken, however, after the European Union last week confirmed provisional import tariffs of up to 37.6% on Chinese-manufactured EVs.
“New energy vehicle exports currently face temporary pressure,” said CPCA secretary general Cui Dongshu.
NEV exports were up 12.3% year-on-year in June, but shrank by 15.2% from the prior month. NEV exports accounted for 21% of total car exports last month, down 3 percentage points from the year-ago level.
Amid the EU’s crackdown, U.S. electric carmaker Tesla’s exports of China-made EVs in March-June fell to the lowest level since the third quarter of 2022, when its Shanghai factory operations were largely suspended during a COVID lockdown. Europe is the largest export market for Tesla EVs made at the Shanghai plant.
Underscoring weakness in consumer demand, a vehicle inventory alert index compiled by the China Automobile Dealers Association rose by 8.3 percentage points year on year to 62.3% in June.
(Reporting by Qiaoyi Li, Zhang Yan and Sarah Wu; Editing by David Goodman and Mark Potter)
