China’s NEV sector off to strong start in first quarter

This photo taken on Feb 24, 2023 shows the assembly line of GAC Aion, an NEV subsidiary of Guangzhou Automobile Group Co., Ltd. (GAC Group), in Guangzhou, south China's Guangdong Province. Photo: Xinhua

This photo taken on Feb 24, 2023 shows the assembly line of GAC Aion, an NEV subsidiary of Guangzhou Automobile Group Co., Ltd. (GAC Group), in Guangzhou, south China’s Guangdong Province. Photo: Xinhua

A number of Chinese new-energy vehicle (NEV) brands saw their shares continue to rise on both US and Chinese bourses on Tuesday after they posted strong sales figures for March. 

Chinese experts believed that the strong sales performance of some leading NEV brands in March reflected the strong momentum in the further upgrading of China’s manufacturing industry. The strong exports performance, despite headwinds, also reflected the competitiveness of Chinese NEVs, they noted.

Private enterprises continue to demonstrate their innovative capability, reflecting the resilience of the Chinese economy and recovering confidence of private enterprises, analysts pointed out. 

Looking forward, experts believe that China’s NEV sales will continue to post strong gains, with an expected high growth rate of around 20 percent in the first half of the year.

BYD, China’s biggest electric vehicle (EV) maker, reported a 46.1 percent year-on-year rise in its March sales on Monday with 302,459 units sold. For the first quarter, the company sold 626,263 NEVs, up 13.44 percent.

China EV makers Nio, Li Auto and XPeng also reported March and first-quarter deliveries on Monday, meeting or just exceeding low expectations, according to media reports.

The strong sales posted by these brands were accompanied by news of the impressive entrance into the market by new brands such as Chinese smartphone and electronics maker Xiaomi.

The company, having debuted its SU7 electric car last week, now had bookings reaching 40,000 units, with backlog orders piled up for as long as eight months, according to media reports on Tuesday.

Under the spotlight of investors and global media outlets, the robust booking data send the company’s shares up 8.97 percent to 16.28 Hong Kong dollars ($2.08) per share at the Hong Kong bourse on Tuesday. Xiaomi’s market value during intraday trading once reached $7.6 billion, surpassing both GM and Ford, according to Reuters.

Some observers hailed Xiaomi’s successful debut into an already crowded scene featuring fierce competition as one more example of the daring entrepreneurial spirit of the Chinese private sector companies and a demonstration of recovering confidence by private companies.

The China Passenger Car Association (CPCA) said on Tuesday that it expects NEV sales to top 820,000 units in March, an increase of 33 percent year-on-year. Month-on-month, the increase is equal to 84 percent.

According to estimates by a CPCA executive, China’s NEV sales accounted for 62 percent of global NEV sales in January and February, the Securities Times reported. 

“As one of the tech-intensive and green ‘new three’ items, the robust growth of the NEV sector is an indication that the Chinese economy is off to a good start in the first quarter,” Li Chang’an, a professor at the Academy of China Open Economy Studies of the University of International Business and Economics, told the Global Times on Tuesday.

In a sign of a further recovery in manufacturing activity, China’s official manufacturing purchasing managers’ index returned to expansion range with a reading of 50.8 in March after running below 50 for five consecutive months, data from the National Bureau of Statistics showed on Sunday.

“The stellar performance of the sector signals China’s global competitiveness when it comes to technology and innovation has further strengthened amid the nation’s broader plan to develop new quality productive forces,” Li said.

“China’s NEV market is a highly competitive sector and the performance by leading NEV brands underlined the resilience of China’s industrial upgrade,” Wu Shuocheng, a veteran automobile analyst, told the Global Times on Tuesday.

“Against protectionist headwinds in some markets, the competitiveness of Chinese companies remained strong,” Wu said.

As the Chinese economy continues to recover, Wu expected NEV sales to register a 20 percent year-on-year growth for the first half of the year with overall sales of passenger vehicles growing by around 5 percent.

Analysts also urged the US and the EU to stop their crackdown tactics against China’s new-energy industry, including the NEV sector, as Chinese NEVs are a contributing, not an undermining, factor for their climate goals.

Protectionist measures taken against Chinese EVs will not improve their competitiveness for their respective auto industries and will undermine their efforts in realizing climate goals, Li said, noting that the noises of decoupling on NEV could not obstruct the rise of Chinese NEV, which is driven by market competition, devotion to innovation and supply chain advantage.

The US and the EU should seek cooperation with China on NEVs so as to tap the great complementarities, rather than taking a protectionist path, analysts said.

China’s logistics industry improves in March as economic recovery accelerates

Staff members load vehicles for export onto a carriage at the Ningde land port in Ningde, southeast China's Fujian Province, Feb. 8, 2024. The Ningde land port, with vehicle transportation railway lines and vehicle loading and unloading platforms, has served as a logistics distribution center and shipment hub for vehicles to be exported to global markets. Photo: Xinhua

Staff members load vehicles for export onto a carriage at the Ningde land port in Ningde, southeast China’s Fujian Province, Feb. 8, 2024. The Ningde land port, with vehicle transportation railway lines and vehicle loading and unloading platforms, has served as a logistics distribution center and shipment hub for vehicles to be exported to global markets. Photo: Xinhua

China’s logistics industry experienced a notable improvement in March, signaling a steady start to the first quarter and the overall recovery of the Chinese economy, industry data showed on Tuesday.

The nation’s logistics industry prosperity index rose to 51.5, marking a 4.4-point increase from the previous month and returning to the expansion zone, according to data from China Federation of Logistics & Purchasing on Tuesday.

All major sub-indices of China’s logistics sector saw an increase, with the business volume index, new order index, and inventory turnover index showing significant improvements. 

He Hui, chief economist with the China Federation of Logistics & Purchasing, said that the accelerated resumption of work following the Chinese New Year break and heightened business activities along the supply chain have increased the demand for logistics in March, providing a good start for the first quarter.

Business volume for road logistics and postal express delivery picked up 4.7 points and 3.7 points respectively from February due to a significant growth in resident consumption and retail business.

The delivery of bulk commodities also picked up. In March the railway logistics index reached 53.5, up 1.8 points from February. The daily freight volume increased 5 percent from the January-February period.

Surveyed companies expressed optimism about future business activities, with the business activity expectation index reaching 55.3 in March, up 0.5 points from the previous month.

Fixed asset investment and operational efficiency in the logistics industry also improved in March, with a growing pace of infrastructure project starting and increased investment in information and digitalization upgrading.

China’s logistics industry is expected to remain in positive throughout the year, benefitting from a slew of policies to boost domestic demand, stabilize investment, and stimulate foreign trade, according to the federation.

The demand for industrial manufacturing and consumer goods trade-ins and demand for sectors such as information communication technology, new energy, equipment manufacturing, automotive manufacturing, and green low-carbon industries will further drive the logistics industry.

China’s factory data for March also show a bright start to the year, adding to an increasing number of economic indicators that point to an accelerating recovery of the Chinese economy.

The Caixin manufacturing purchasing managers’ index (PMI) on Monday reached 51.1 in March, 0.2 points higher than that in February and the highest level since March 2023. 

China’s official manufacturing PMI data on Sunday also reflected a positive picture for factory activity in March. The official manufacturing PMI stood at 50.8, returning to expansion territory for the first time since September 2023.