In the first quarter, the production and sales of automobiles showed a remarkable increase in structural growth
On April 9th, the China Automobile Association held a press conference to discuss the latest developments in the country’s auto production and sales. The event highlighted that the automotive market is showing signs of recovery, driven by sustained government stimulus measures. In March, both car production and sales surpassed one million units, marking new monthly records. Every model experienced sequential growth, signaling a positive trend across the industry.
According to the SAIC Production and Sales Statistics, March saw 1,095,400 vehicles produced and 1,109,800 sold, representing year-on-year increases of 5.55% and 5.01%, respectively. Notably, all vehicle models recorded growth rates exceeding 25%. Commercial vehicles also showed improvement, with semi-trailer tractors continuing their two-month growth streak and non-integrated passenger vehicles doubling their performance compared to previous months.
Zhu Yiping, assistant secretary-general of the China Association of Automobile Manufacturers, explained that the strong performance in March was due to a combination of seasonal trends and policy support. Historically, March has been a peak period for car sales, with seven months since 2005 seeing record highs, including five in March. This seasonal factor, along with policy-driven demand, led to a significant rise in production and sales. Although the year-on-year increase of 5% may not seem high given the strong base, Zhu emphasized that it represents a positive signal for the year ahead.
In the first quarter of this year, domestic auto production reached 2,567,600 units, while sales totaled 2,668,800, reflecting a 1.91% and 3.88% increase, respectively. Zhu noted that despite a weak performance in the last two quarters of the previous year, achieving even modest growth in the first quarter this year was challenging. He attributed the improvement to government policies and rising expectations for economic recovery.
Passenger cars outperformed commercial vehicles in terms of growth. First-quarter passenger car sales rose by 7.81%, with crossover vehicles increasing by 34.78%. These models have shown consistent month-on-month and year-on-year growth for three consecutive months, becoming key drivers of the segment. Sedan sales grew by 3.01%, while low-emission vehicles, heavily influenced by policy incentives, saw significant gains. Sales of 1.6-liter and smaller passenger cars reached 1,411,400 units, up 21.93% year-on-year, outpacing the industry average by 14 percentage points and capturing 70.72% of the market—up 8.19 percentage points from the same period last year.
In contrast, commercial vehicles faced challenges. Only commercial trucks saw a 11.22% increase, while other categories, including semi-trailer tractors, experienced sharp declines, with sales down 70% year-on-year. Zhu attributed the truck sector's struggles to delayed purchasing power from the second half of last year, which had not yet fully materialized. Additionally, rural vehicle sales remained underperforming, failing to provide meaningful support.
Structural growth was evident in the first quarter, with overall production and sales growing at a low rate. However, the industry’s economic performance did not improve, with key indicators like revenue and profit declining sharply. From January to February, main business income for large-scale auto enterprises fell by 9.42% to 320.413 billion yuan, while total profit dropped by 50% to 9.879 billion yuan. The 19 major enterprise groups under the China Automotive Industry Association also reported declines, exceeding the industry average.
Car exports continued to decline, with first-quarter exports reaching only 61,000 units—a 62.06% drop compared to the same period last year. Top export companies saw significant reductions in shipments.
Despite the positive March figures and a slight rebound in the first quarter, Zhu warned against over-optimism. Structural challenges and weak economic indicators continue to weigh on the industry. He urged the government to maintain supportive policies, particularly for exports and commercial vehicles, to help the sector achieve a broader recovery.
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