Year 2023 to be more painful for China’s auto industry, passenger vehicle sale may drop double-digit – Credit Suisse
VIEWS & ANALYSIS
Year 2023 to be more painful for China’s auto industry, passenger vehicle sale may drop double-digit – Credit Suisse
VIEWS & ANALYSIS

Year 2023 to be more painful for China’s auto industry, passenger vehicle sale may drop double-digit – Credit Suisse

 

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The year of 2023 will be a more painful year for China’s auto industry , said Bin Wang, Co-Head of Autos Securities Research, Asia Pacific, Credit Suisse. 

Passenger vehicle sales posted 38% year-on-year growth in the third quarter given favorable policy and the momentum is expected to last into the fourth quarter, but next year, sales may drop by double-digit, as supportive policy will end soon, he said.

About 100 new energy vehicle (NEV) models are expected to hit the market next year, which will drive NEV sales up by 40% to 9.4 million units, as high oil prices will force consumers to buy NEVs and fierce competitions will foster promotion activities to accelerate new car launches. 

As purchase tax for conventional fuel vehicles will rise by 10% next year, some automakers may cut prices to lower the impact on car buyers, and meanwhile, starting January next year, China will gradually remove subsidies for NEV purchases, therefore some NEV companies may also lower prices to offset the impact, it said.

Although auto chips have been in short supply this year, the impact on NEVs is limited, as automakers have built factories in mainland China and the technology is mature and semiconductor is no longer a major setback, he added.