China Automotive Growth Outlook, 2022

This study assesses the automotive market in China, with a focus on the passenger vehicle market segment. Within this, electric vehicles, as well as charging and battery swap, will be discussed further. China’s automotive market has grown rapidly, particularly after the 2008 Beijing Olympics. The unit shipment of China’s passenger vehicle market has consistently exceeded 20 million since 2015. Despite years of growth, automotive sales declined between 2017 and 2020 due to the economic pressure from the US-China trade war in 2018, the reduction of EV subsidies in 2019 (by an average of 50% compared to 2018), and the reduction of production and the pandemic-induces national lockdown in 2020. In 2021, automotive sales increased to 21.5 million units, up from 20.2 million units in 2020. The major growth drivers were the rapidly increasing sales of EVs and the improvement of China’s domestic brand competitiveness; this growth trend will continue in 2022, with a 7.5% year-over-year increase to 23.1 million units of passenger vehicle sales. As a result of the government’s multiyear push-pull strategies, the EV segment has grown rapidly. In 2021, China’s automotive market achieved year-over-year growth of 6.5%. Tesla is a major contributor to the battery electric vehicle (BEV) segment because production started in China, a price-competitive market. Its main consumers come from cities with strong economic strength and driving restriction implementations, such as Beijing, Shanghai, Shenzhen, and Guangzhou. BYD is the key pioneer in Plug-in Hybrid EV (PHEV) technology, launching the world’s first PHEV production in 2008. In addition to years of experience, BYD also offers competitive PHEVs that are priced similar to gasoline vehicles, starting at $16,928. Chinese consumer purchase interest has gradually shifted, and their confidence in domestic Chinese brands has increased. For example, the proportion of Chinese brands in total automotive sales increased from 23.2% in 2020 to 44.4% in 2021, with a total unit shipment of 9.5 million vehicles in 2021. In this research service, Frost & Sullivan highlights the total size of the Chinese automotive market and provides historical and forecast data from 2016 to 2022. This study also defines the key highlights of China’s automotive industry in 2021 and future market trends in 2022. It discusses further segment information, including vehicle subsegment and powertrain subsegment; connected and autonomous driving vehicles are also included. Author: Ming Lih Chan