F Ford Motor Company

By Trefor Moss 

Auto sales in China recovered to pre-pandemic levels in the first three months of 2021, though the world's largest car market was subdued, with the exception of red-hot demand for electric vehicles.

Passenger-vehicle sales increased 69% year over year to 5.09 million in the January-to-March period, the China Passenger Car Association said Friday. That put sales back where they were two years ago, still down significantly compared with 2018's record March quarter, when 5.67 million cars were sold in China.

The country, a critical market for global auto makers because of its unrivaled scale, is unlikely to regain the heights of the previous decade's boom until around 2024, some analysts say. The weak performance of local stock markets since February has sapped Chinese consumers' appetite for buying new vehicles in recent weeks, the association said.

Once a key source of growth, China has become a tough place for U.S. auto makers in particular. General Motors Co. sold 780,200 vehicles in the January-to-March period, its worst first quarter in China since 2012, not counting virus-hit 2020.

A long-term decline in Chevrolet sales has weakened GM's position in its only major global market outside the U.S. Chevrolet is one of several once-popular foreign brands to have been squeezed by China's more competitive market conditions. Its sales of 64,800 in the March quarter were a fraction of the roughly 170,000 Chevrolets sold in China in the same period in 2015.

Ford Motor Co. has stabilized its China business after years of dwindling sales. Its 153,822 sales for the quarter were an improvement on the 136,279 vehicles it sold in the country in the same period two years ago. The company sold more than twice as many cars in the same period in 2016, its best year in China.

In contrast, premium auto makers have continued to thrive as greater numbers of affluent Chinese consumers trade up from mass-market brands, a trend that has chiefly benefited German auto makers. BMW AG and Mercedes-Benz-maker Daimler AG both broke sales records in the quarter, selling 229,748 and 222,520 cars in China, respectively.

Electric-vehicle sales also surged in the quarter, with 437,000 units sold.

Tesla Inc. had by far its best month in China, selling 35,478 locally built Model 3 and Model Y cars, according to the passenger-car association, suggesting that recent controversies over quality issues and the potential for Tesla cars to spy on Chinese government facilities have done little to dent the company's local appeal. Of the vehicles sold last month, 25,327 were Model 3s and 10,151 were Model Ys, the association said.

The 69,280 vehicles Tesla sold in China during the first quarter accounted for more than one-third of the EV maker's global Model 3 and Model Y sales during the period. Tesla started delivering the made-in-China Model Y in January.

U.S.-listed Chinese EV startups Li Auto Inc., Nio Inc. and XPeng Inc. all reported record quarterly sales, though their combined tally of roughly 46,000 cars for the first quarter means they still significantly lagged behind the market leaders in terms of volume.

Raffaele Huang contributed to this article.

Write to Trefor Moss at Trefor.Moss@wsj.com

(END) Dow Jones Newswires

April 09, 2021 07:42 ET (11:42 GMT)

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