Retail car sales in China surge….
….along with shares in EV makers and vehicle insurance registrations
Reuters Shanghai has reported that retail car sales jumped 54% in the republic in the second week of June compared the same period in May and could grow even more.
The data came from the China Passenger Car Association (CPCA), which reported that sales of passenger vehicles in that period increased to 349,000 units. The Association is predicting that June car sales could swell even further (10-20%) compared to 2021 figures. May had already seen a surge of 30% (from 1.04m vehicles in April to 1.35m in May).
The surge has prompted a sharp rise in the value of shares of Chinese electric car makers. Shares in NIO, for example, rose by 14%, XPeng, 5.4%. Shares in BYD, however, showed a slight downward tip (-1.9%).
Although these figures are promising, this is of course a recovery from the severe blows dealt by COVID-19 lockdowns, which lasted a lot longer in China. Shanghai, Beijing and other cities have only just been lifting lockdown measures since April.
Could this just be pent up demand?
It’s likely that pent up demand is behind the current boom. That said, it could also be China’s continued drive to dominate in the EV stakes. Booming retail sales have had a knock-on effect on the insurance market, causing a spike in vehicle insurance registrations, particularly for EVs. EV insurance policy registrations were up 21% from the previous week.
NIO’s shares rose after it announced the launch of the ES7 sport utility vehicle, heralding what has been described by analysts as “the most important product cycle in the company’s history”. Deliveries are on track to reach 25,000 units a month by the end of 2022 (up from 7,000 a month in May).
It’ll be interesting to see how this develops in the face of increasing competition from Europe, North America and elsewhere. And how will sales of Chinese vehicles fair outside of the republic? Global Fleet will be following developments closely.
Image of the Xpeng P7 at the Shanghai auto show, courtesy of Shutterstock