Page 144 - 2023 White Paper on the Business Environment in China
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3 White Paper on the Business Environment in China
2.3 Automotive Industry
Key Take-Aways tax break, up 23.8 percent year-on-year and up
34.4 percent month-on-month. Sales of passenger
• Automotive transportation and logistics are vehicles soared 41.2 percent year-on-year to 2.22
among the sectors that are expected to see faster million units in June (Xinhua, China's Auto Market).
adoption of artificial intelligence technologies in
China over the next decade. Automotive transportation and logistics are
among the sectors that are expected to see faster
• China contributed nearly 50 percent of the adoption of artificial intelligence technologies
global growth in new energy vehicle (NEV) sales in in China over the next decade, driving billion-
2021. However, the market is still in its early stages. dollar opportunities. Market consultancy
McKinsey forecasts that by 2030, AI can boost
• A used car market is beginning to take transportation and other key sectors in China,
shape in China, especially in rural areas. adding significant economic value, if strategic
cooperation and capability building occur across
Background multiple dimensions. China's auto market stands
as the largest in the world, with the number of
In the first five months of 2022, Chinese-brand vehicles in use surpassing that of the United
car sales accounted for 46 percent of the total States. The sheer size—which McKinsey expects to
passenger car sales in the Chinese market, up grow to more than 300 million passenger vehicles
8.6 percentage points from the same period last on the road in China by 2030—provides a fertile
year. Domestic auto brands recorded robust landscape of AI opportunities (Li, Nation Seeks).
growth in the new energy vehicle market, with
the market share of leading firms such as BYD, Auto Market
Geely, Changan, and Chery recording remarkable
growth (Xinhua, Sales of Chinese). However, auto The auto sector is a pillar industry of the national
production and sales fell sharply from mid-March economy, and boosting the automobile market
to April 2022 as the resurgence of COVID-19 in is essential to guaranteeing employment and
Jilin province and Shanghai disrupted the supply stabilizing economic growth. China is the world's
chains of the auto sector. Other factors, including largest auto market, with the number of vehicles in
the car chip shortage and rises in costs of raw use surpassing that of the United States. The sheer
materials for automotive batteries, also weighed size, which is expected to grow to more than 300
on the market. China unveiled a slew of stimulus million passenger vehicles on the road in China by
policies in June 2022 to revive the auto market and 2030, provides a fertile landscape for investors.
stimulate consumption. The government halved China's passenger vehicle market recorded
the car-purchase tax for passenger vehicles priced robust growth in July 2022 with rising sales and
at no more than 300,000 RMB and with 2-liter production. Some 1.82 million passenger cars were
engines or smaller, which was effective from June sold via retail channels in July 2022, up 20.4 percent
1 to the end of the year. That seems to have been year-on-year, posting a relatively high growth
a silver bullet for the industry as the world's largest compared with that in the past decade. Production
automobile market recovered immediately due to of China's passenger vehicles amounted to 2.16
the cut in car-purchase tax. A total of 2.5 million million units in July, surging 41.6 percent year-on-
motor vehicles were sold in the first month of the year. The improving logistics and supply chains,
144
2.3 Automotive Industry
Key Take-Aways tax break, up 23.8 percent year-on-year and up
34.4 percent month-on-month. Sales of passenger
• Automotive transportation and logistics are vehicles soared 41.2 percent year-on-year to 2.22
among the sectors that are expected to see faster million units in June (Xinhua, China's Auto Market).
adoption of artificial intelligence technologies in
China over the next decade. Automotive transportation and logistics are
among the sectors that are expected to see faster
• China contributed nearly 50 percent of the adoption of artificial intelligence technologies
global growth in new energy vehicle (NEV) sales in in China over the next decade, driving billion-
2021. However, the market is still in its early stages. dollar opportunities. Market consultancy
McKinsey forecasts that by 2030, AI can boost
• A used car market is beginning to take transportation and other key sectors in China,
shape in China, especially in rural areas. adding significant economic value, if strategic
cooperation and capability building occur across
Background multiple dimensions. China's auto market stands
as the largest in the world, with the number of
In the first five months of 2022, Chinese-brand vehicles in use surpassing that of the United
car sales accounted for 46 percent of the total States. The sheer size—which McKinsey expects to
passenger car sales in the Chinese market, up grow to more than 300 million passenger vehicles
8.6 percentage points from the same period last on the road in China by 2030—provides a fertile
year. Domestic auto brands recorded robust landscape of AI opportunities (Li, Nation Seeks).
growth in the new energy vehicle market, with
the market share of leading firms such as BYD, Auto Market
Geely, Changan, and Chery recording remarkable
growth (Xinhua, Sales of Chinese). However, auto The auto sector is a pillar industry of the national
production and sales fell sharply from mid-March economy, and boosting the automobile market
to April 2022 as the resurgence of COVID-19 in is essential to guaranteeing employment and
Jilin province and Shanghai disrupted the supply stabilizing economic growth. China is the world's
chains of the auto sector. Other factors, including largest auto market, with the number of vehicles in
the car chip shortage and rises in costs of raw use surpassing that of the United States. The sheer
materials for automotive batteries, also weighed size, which is expected to grow to more than 300
on the market. China unveiled a slew of stimulus million passenger vehicles on the road in China by
policies in June 2022 to revive the auto market and 2030, provides a fertile landscape for investors.
stimulate consumption. The government halved China's passenger vehicle market recorded
the car-purchase tax for passenger vehicles priced robust growth in July 2022 with rising sales and
at no more than 300,000 RMB and with 2-liter production. Some 1.82 million passenger cars were
engines or smaller, which was effective from June sold via retail channels in July 2022, up 20.4 percent
1 to the end of the year. That seems to have been year-on-year, posting a relatively high growth
a silver bullet for the industry as the world's largest compared with that in the past decade. Production
automobile market recovered immediately due to of China's passenger vehicles amounted to 2.16
the cut in car-purchase tax. A total of 2.5 million million units in July, surging 41.6 percent year-on-
motor vehicles were sold in the first month of the year. The improving logistics and supply chains,
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