The export of Chinese cars has sharply increased, partially offsetting the decline in sales in the domestic market.

The Chinese Association of Automobile Manufacturers reported a significant decline in car sales in the country in June, which was a result of the overall economic instability. However, the growth in exports was able to partially offset this decline. Car sales in China fell by7.4%compared to the same period last year, amounting to1.8 million carsAt the same time, car exports have increased by29%having reached400 thousand unitsAccording to the monthly report from the association, exports increased in the first six months of the current year by31.5%...and the volume of internal sales has only slightly increased.1.6%.

This increase in exports is occurring against the backdrop of growing concerns in Europe and the United States that inexpensive cars made in China may displace local automotive companies. Although the worry is mainly focused on bright and relatively affordable electric vehicles from China, the bulk of the export growth has come from gasoline-powered cars. In the first half of the year, their sales increased by36%and composed78%from the total volume of car exports. In contrast, exports of electric vehicles from China have decreased by2.3%while hybrid cars showed impressive growth180%from a small basis.

The increase in exports has compensated for weak sales of gasoline cars in the domestic market, which is stagnating as consumers increasingly switch to electric and hybrid vehicles.

• Brazil
• Mexico
• United Arab Emirates
• Saudi Arabia
• Belgium
• United Kingdom

Last week, the European Union imposed temporary tariffs on Chinese electric vehicles, claiming that state subsidies give Chinese automakers an unfair advantage. Chinese companies are beginning to move their production outside the country. For example, BYD, the largest electric vehicle manufacturer in China, opened a factory in Thailand last week and plans to build plants in Brazil, Hungary, and Turkey.

The decline in sales in China has now marked the second consecutive month of decrease. According to data collected by the China Passenger Car Association, this is the first wave of declining sales figures for three consecutive months. A significant downturn in the real estate sector has negatively impacted economic growth and adversely affected consumer confidence.