Chinese consumers slash new car purchases amid rising electric vehicle sales
Auto sales in China fell 9.4% year-on-year this October to 2.33 million units, according to data released by the China Automotive Industry Association (CAAM) on Wednesday.
According to the above-mentioned association, the decline decreased by 10.2 p.p. compared to September. And in monthly terms, car sales in the country increased by 12.8% in October.
In October, sales of new energy vehicles (NEV) in China, by contrast, rose significantly. NEV sales increased 7.2% MoM and 134.9% YoY to 383,000 units.
Falling demand for cars has already affected steel production, which in October decreased by 4.9% compared to September and by 21.4% compared to October last year to 2.338 million tons per day. This is the lowest rate since March 2018.
The demand for steel in the PRC is also negatively affected by the seasonal decline in construction work and high energy prices.
The energy crisis in China is forcing many factories to suspend work or switch to a two-day work week, reducing production volumes. The impact of power shortages can be seen in northern PRC, where factories producing raw materials such as steel face difficulties that will lead to shortages in other factories that need these materials to make finished goods. Factory prices in China rose the most in October. at a fast pace in 26 years. China's official PPI rose 13.5% from October 2020, according to data released by the National Bureau of Statistics on Wednesday, the largest monthly jump since 1995.