As 2024 draws to a close, China's automotive industry has achieved another strong performance.
From SINA
As 2024 draws to a close, China's automotive industry has achieved another strong performance. The China Association of Automobile Manufacturers (CAAM) projects that annual vehicle production and sales will once again surpass 30 million units.
The China Passenger Car Association (CPCA) anticipates retail sales of passenger vehicles to grow by 5.8% to 6% this year, outpacing last year's growth. Notably, sales of new energy passenger vehicles (NEVs) are expected to reach 11 million units, with retail penetration rates exceeding 50% for five consecutive months since July. This rapid growth is reshaping the industry: traditional automakers are undergoing leadership shifts, emerging brands face a wave of consolidation, and while price wars have become normalized, competition in technology has intensified, accelerating the transformation of China's automotive market.
This year's NEV price competition, unlike the subsidy-driven price wars of 2023, has been driven by declining supply chain costs, leading to a more rational pricing environment that stabilized towards the end of the year. CPCA Secretary General Cui Dongshu noted that while aggressive price wars in the first half of the year dampened consumer confidence, the third quarter saw greater market stability. This trend was supported by trade-in incentives and NEV replacement subsidies in the fourth quarter. However, the leak of an internal BYD memo requesting a 10% price cut from suppliers suggests that price competition may continue into 2025.
Beyond pricing, smart technology has emerged as the primary battleground in the NEV market's "second half." Tesla's launch of its end-to-end autonomous driving system this year has spurred Chinese automakers, including XPeng, Li Auto, NIO, Huawei, and BYD, to accelerate development in this space. Meanwhile, traditional automakers such as GAC and SAIC are deepening collaborations with Huawei, following similar partnerships established by Seres, BAIC, and Chery, to drive their intelligent transformation. The anticipated entry of Tesla's Full Self-Driving (FSD) system into China next year is expected to ignite fierce competition in autonomous driving technology.
CAAM remains optimistic about the industry's outlook, forecasting annual vehicle production and sales to stay above 30 million units. The organization has also called for the continuation and early implementation of policies to stimulate automotive consumption in 2025.