China's NEV Sales Keep Falling on Reduced Subsidies
Yicai Global
/SOURCE : Yicai
China's NEV Sales Keep Falling on Reduced Subsidies

(Yicai Global) March 9 -- Reduced subsidies for China's new-energy vehicles have caused the market to slump this year, with a number of leading makers battling falling sales as a result.

Anhui Jianghuai Automobile Group Corp. [SHA:600418] didn't sell a single pure-electric passenger vehicle in January, and saw a steep decline in sales last month compared with the same time a year earlier. It produced 414 pure-electric passenger cars and sold 125 last month, down 69 and 89 percent on the year respectively, according to company data. Sales of traditional models also fell 18 percent on the year.

Over the past few years, China introduced a number of subsidies to cut vehicle emissions and develop the auto industry, becoming the world's largest NEV market in the process. After shifting 351,000 units last year, subsidies are cooling off as more and more green cars hit the road.

Other automakers struggling with electric car sales this year include BYD Co. [SHE:002594], Zhejiang Geely Holding Group Co. and BAIC Motor Corp. [HKG:1958]. The latter saw NEV sales drop 36 percent in February compared with the same month last year, company data from yesterday shows.

The government began offering subsidies in 2010, with buys able to obtain a license player faster and receive discounts of up to CNY120,000 (USD17,000). Authorities said they will readjust the list of subsidized vehicles after a number of fraudulent claims by makers last year. With the national list and regional policies still not fixed, sales were weak for the first two months of the year.

On top of a dive in NEV sales, Anhui Jianghui also recorded steep declines in traditional car sales. In particular, passenger car sales fell to under 48,000 last month, a 40 percent hit from over 82,000 a year earlier. Although the Chinese New Year knocked sales early in the year, Guangzhou Automobile Group Co., Great Wall Motor Co. and Geely all reported year-on-year growth for total sales last month.

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Keywords: MSCI