China's car sales drop for seventh month in April; exports roar

China's ​domestic car sales fell for a seventh straight month in April ​amid intense competition in the world's biggest auto market but exports stayed strong as automakers increasingly targeted overseas markets.

Sales at home dropped 21.6% from a year earlier to 1.4 million vehicles last month, data from the China ‌Passenger Car Association (CPCA) said ⁠on ⁠Monday.

Combustion engine car sales missed expectations due to high oil prices and demand for plug-in hybrids was also ​sluggish, said Cui Dongshu, the CPCA's secretary-general.


Electric vehicle and plug-in hybrid sales, accounting for 60.6% of the total, ​slid 6.8%, extending a losing streak to four months.

In contrast, EV and plug-in hybrid vehicle exports shot up 111.8% from a year earlier, outpacing an 80.2% increase in overall car exports, ​as rising global fuel prices triggered by the U.S.-Israeli war ⁠on Iran ‌bolstered EV demand in overseas markets.

The widening gap between domestic weakness and ​export strength is ​evident at BYD,, the world's largest EV maker. Its sales downturn globally ⁠stretched to an eighth month in April despite persistent strength in ​overseas shipments.

Last month, Morgan Stanley maintained its expectation that China's domestic ​and export car sales would fall 2% this year, but raised its export growth estimate to 33% from 15%. It also expects the decline in domestic sales to deepen to 11% from an earlier projection of 6%.

Chinese automakers are increasingly shifting away from budget vehicles priced under 150,000 yuan ($22,050.72) toward larger, feature-rich vehicles. A wave of premium SUVs unveiled at the ‌Beijing auto show last month underscores the move upmarket, a boost for premium brands such as Nio and Geely's Zeekr.

But robust growth in premium ​EVs and PHEVs, ​now dominated by domestic brands, ⁠has not been enough to offset the overall downturn. Weak demand for affordable cars, which account for a sizable share of new car sales, remains a drag on the sector.

Sluggish ​sales in the entry-level segment become a "key bottleneck" holding back the sector's recovery, said Cui at CPCA.

He suggested China adopt standards for mini vehicles akin to Japan's so-called "kei car" category to create a regulated, low-cost segment that caters to elderly and rural consumers, unlocking suppressed demand and boosting entry-level sales.