Car sales in China fell in October for the first time in more than a year, amid the gradual withdrawal of vehicle change incentive programs promoted by local governments, adding to factors that are still ongoing. … Affect demand.
According to data from the China Passenger Car Association (PCA), retail sales of passenger cars – including sedans, SUVs and minibuses – fell by 0.8% compared to the same month a year earlier. Excluding the January decline caused by the Lunar New Year holiday, this is the first contraction since August 2024.
During the first 10 months of the year, cumulative sales rose 8.3%, according to PCA figures. However, the end of local support for vehicle changes threatens to slow the pace of the market.
Provinces and major cities, such as Shanghai, have reduced or eliminated incentives that offered thousands of yuan to those who get rid of their old cars. As of October 22, more than ten million applications have been submitted to benefit from these programs.
Added to the disappearance of this aid are structural problems, such as excess production capacity and a prolonged price war that continues to put pressure on manufacturers’ profit margins. Although Beijing has tried to contain the fierce competition, brands now face the challenge of meeting their annual sales targets without one of the main drivers of demand.
According to General Secretary of the Communist Party of China Cui Dongshu, the long Golden Week holiday in October also affected the monthly decline. However, the cumulative growth of 8.3% so far this year indicates that the Chinese auto market is maintaining a strong level of activity, despite increasing signs of a slowdown.
This decline in sales is the next in a series of bad news for BYD, the largest manufacturer in the Asian country. The company recorded a second consecutive decline in its quarterly results after the Chinese government took action against deep discounting, one of the most frequently used tools in its business strategy.
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