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China’s vehicle output to rise to 35M

China remains the world’s largest vehicle market by both annual sales and manufacturing output, with its vehicle production expected to reach 35 million units by 2025, the US Commerce Department said.

At the same time, according to China Yuchai International, Chinese government policies have set specific industrialization targets for new energy vehicles (NEVs) and plug-in hybrid vehicles, in terms of production and annual and cumulative sales.

According to data from the Chinese Ministry of Industry and Information Technology, more than 25 million vehicles were sold in 2020, including 19.99 million passenger vehicles, 6.5% less than in 2019.

Meanwhile, commercial vehicle sales reached 5.23 million units, an increase of 20% from 2019.

US-made vehicles exported to China have faced high tariff barriers in recent years.

However, after China lifted its retaliatory tariffs on US cars in late 2019, they now generally face the same 15% tariff that China applies to most major trading partners.

The vehicles (HS codes 8703 and 8704) were included in the Phase One Trade Agreement between the United States and China, opening up potential opportunities for US exporters.

Vehicle production

In the wake of the Covid-19 pandemic, the Chinese government has taken steps to boost car consumption.

According to the Department of Commerce, these steps include postponing the implementation of China’s Six Emissions Standard until January 2021, providing fiscal and tax support, accelerating the phase-out of obsolete diesel trucks, and optimizing trade channels for second-hand vehicles. .

From 2017 to 2020, China’s motor vehicle imports decreased from 1,246,800 to 927,632 units, while vehicle imports from the United States decreased from 274,241 to 145,761 units.

New energy vehicles

Until now, the Chinese government has issued a series of supporting subsidies and preferential policies to support the NEV industry comprehensively.

This subsidy scheme resulted in increased sales of electric commercial vehicles in China in the past.

Although their amount was reduced, the subsidies were last extended in January 2021 until the end of 2022.

Since December 2016, China has gradually reduced subsidies for NEVs as part of an overall shift to shift China’s commercial vehicle market from “policy-driven” to “market-driven”, while continuing to emphasizing the accelerated growth of the NEV industry in the future.

According to China Yuchai International, the industry expects total NEV sales in the 14th Five-Year Plan period to reach 10 million units.

 

Redacción Opportimes

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