China car sales jump in June but EV price war concerns intensify
Sales grew 18.6 per cent in June year-on-year to 2.1 million vehicles from a 13.9 per cent rise in May. First-half sales were up 11.2 per cent to 11.1 million vehicles, data from the China Passenger Car Association (CPCA) showed on Tuesday (Jul 8).
EV and plug-in hybrids sales, making up 52.7 per cent of total car sales, increased a hefty 29.7 per cent in June from a year earlier, up from 28.2 per cent in May.
But local EV giant BYD saw car sales growth slow to 11 per cent from 14.1 per cent in May. Li Auto, which along with BYD are the only two listed Chinese EV makers with full-year profitability, logged a 24.1 per cent sales decline last month, reversing a 16.7 per cent rise in May.
Geely Auto raised its 2025 sales target by 11 per cent to 3 million units, but its sales growth eased to 42 per cent from 46 per cent in May.
The cooling or falling sales pointed to 'a big dilemma' facing the industry, as any escalation into 'a life-or-death competition could put some at risk of being eliminated,' said Cui Dongshu, secretary-general of CPCA.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
Warning the industry of excessive competition, Chinese regulators have called on automakers to halt a growing price war, which is heightening worries about overcapacity amid weak domestic demand and US tariffs.
Concerns about oversupply persist, as scepticism over car sales grows with reports of new vehicles being shipped overseas as 'used' since 2019, according to a Reuters report in late June.
Setting itself apart from industry-wide oversupply woes, Xiaomi, an emerging competitor to Tesla, received exceptionally strong orders for its second EV, the YU7 sports utility vehicle, which went on sale last month.
Tesla's China sales swung to a 3.7 per cent increase last month from a 30 per cent fall in May, in the wake of its fastest-ever model ramp-up with just six weeks to full production of the refreshed Model Y in its Shanghai plant.
Car exports rose 23.8 per cent in June from the year before, against a 13.5 per cent increase in May, CPCA data showed. REUTERS
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNA
18 minutes ago
- CNA
Musk says Tesla, Samsung sign $16.5 billion chip supply deal
SEOUL : Tesla CEO Elon Musk said the U.S. automaker had signed a $16.5 billion deal to source chips from Samsung Electronics, a move expected to bolster the South Korean tech giant's loss-making contract manufacturing business. Samsung's shares jumped as much as 6.8 per cent to their highest since September last year after news of the deal. Musk said Samsung's new chip factory in Taylor, Texas will make Tesla's next-generation AI6 chip, potentially re-energizing the project that has faced long delays amid Samsung's difficulties in retaining and attracting major clients. "Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency. This is a critical point, as I will walk the line personally to accelerate the pace of progress. And the fab is conveniently located not far from my house," Musk said in a post on X on Monday. "The $16.5B number is just the bare minimum. Actual output is likely to be several times higher," he said in another post. According to a senior analyst at NH Investment & Securities, Ryu Young-ho, Samsung's Taylor fab "so far had virtually no customers, so this order is quite meaningful". In October, Reuters reported that Samsung had postponed taking deliveries of ASML chipmaking equipment for its Texas factory as it had not yet won any major customers for the project. It has already delayed the plant's operational start to 2026. POTENTIAL PRODUCTION TIMELINE While no timeline was provided for AI6 chip production, Musk has previously said that next-generation A15 chips will be produced at the end of 2026, suggesting A16 would follow. Lee Dong-ju, an analyst at SK Securities, expects production in 2027 or 2028, but Tesla has a history of missing its targets. Samsung currently makes Tesla's A14 chips, which power its Full Self-Driving driver assistant system, while TSMC is slated to make the AI5, initially in Taiwan and then Arizona, Musk has said. Samsung, the world's top memory chip maker, also produces logic chips designed by customers through its foundry business. The Texas project is central to Samsung Chairman Jay Y. Lee's strategy to expand beyond its bread-and-butter memory chips into contract chip manufacturing. Samsung currently holds just 8 per cent of the global foundry market, far behind industry leader TSMC, which has a 67 per cent share, data from market researcher Trendforce show. Samsung had earlier announced the $16.5 billion chip supply deal without naming the client, saying the customer had requested confidentiality about the details of the deal, which will run through the end of 2033. Three sources briefed about the matter told Reuters that Tesla was the customer for the deal. HELP SAMSUNG'S FOUNDRY BUSINESS The deal with Tesla comes as Samsung, which is due to report its earnings on Thursday, faces mounting pressure in the race to produce artificial intelligence chips, where it trails rivals such as TSMC and SK Hynix. This lag has weighed heavily on its profits and share price. Pak Yuak, an analyst at Kiwoom Securities, said the deal would help reduce losses at Samsung's foundry business, which he estimates exceeded 5 trillion won ($3.6 billion) in the first half of the year. Analysts say Samsung has struggled to retain key clients, with many defecting to TSMC for advanced chips, underscoring technological challenges the firm faces in the race to stay relevant in the capital intensive business. TSMC counts Apple, Nvidia and Qualcomm among its customers. It is not clear whether the Samsung-Tesla deal is related to ongoing trade talks between South Korea and the United States. Seoul is seeking U.S. partnerships in chips and shipbuilding amid last-ditch efforts to reach a trade deal to eliminate or reduce potential 25 per cent U.S. tariffs.
Business Times
31 minutes ago
- Business Times
iFast targets higher dividend payout ratio amid growth across business units
[SINGAPORE] Digital bank and wealth management platform iFast is targeting a payout ratio of between 25 and 30 per cent as profitability improves across the business. 'We have come to a stage where we feel comfortable that we can start to increase the dividend more significantly,' said CEO Lim Chung Chun at a briefing on Monday (Jul 28). This has resulted in an expected dividend per share of S$0.08 for FY2025, a 35.6 per cent increase from S$0.059 in FY2024. The second interim dividend of S$0.02 per share for the first half of 2025 is also an increase of 33.3 per cent from the second interim dividend of S$0.015 in H1 2024. 'As the balance sheet gets bigger and bigger, then we'll probably feel more comfortable in increasing the dividend payout ratio,' said Lim. Customer accounts in iFast have crossed the one-million mark, and customer deposits in iFast Global bank hit S$1.5 billion at the end of Q2 2025, a growth of 45 per cent year on year. The company is holding fast to its Hong Kong guidance, with a net revenue target of over HK$1 billion (S$163.27 million) in FY2025 and profit before tax of over HK$380 million. Net revenue for H1 2025 stood at HK$403.7 million and profit before tax for H1 2025 stood at HK$163.7 million. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The Hong Kong business is expected to perform better in the second half of 2025, as iFast expects to onboard all the Trustees of MPF – the Hong Kong retirement savings scheme – onto the eMPF platform by the end of the year. The eMPF platform is a central and integrated electronic platform to standardise, streamline and automate MPF scheme administration work. 'The bulk of the eMPF business will be onboarded by the end of the year, so correspondingly, we expect that the revenue and the profitability will actually be increased,' said Lim. Operating expenses in Hong Kong are also expected to ramp up as hiring increases to cope with the incoming volume, with each subsequent quarter of 2025 being higher than the last. As revenue increases with more onboarding, iFast expects that profitability in the second half will be better than the first half. A decision has also been made to prioritise the eMPF business in Hong Kong, delaying Orso – a Hong Kong pension scheme – to next year rather than Q2 2025. As a result, the Orso business is only expected to start contributing early next year, with the current Hong Kong guidance taking that into account. The China segment of iFast's wealth management business has also seen losses narrow in H1 2025, falling to a loss of S$1.8 million from a loss of S$5.9 million in FY2024 and a loss of S$7.2 million in FY2023. Lim attributes this to cost management and reduction as well as improvement in revenue for the segment. A China desk was launched at the end of last year by iFast in a bid to serve more offshore Chinese money, and complement its onshore business in that country. The offshore business is progressing well, and staff from China have relocated to Singapore to staff the desk, said Lim. 'We are aware that there's still a level of performance that's still not good enough. We certainly want to work towards profitability, the current expectation is that we will be able to narrow losses further in the quarters ahead and get into profitability,' he said without disclosing a target date. Artificial intelligence (AI) capabilities are also being built up at iFast, with an AI innovation centre set up at the end of 2023. The AI capabilities will be focused on the bank, with the need to transcend any language barrier given the global nature of the bank. 'You want to be able to serve customers from around the world who are using different languages, but if you want them to bank with us in one or a few locations, then the use of AI will actually be very important in the long run,' said Lim.
Straits Times
2 hours ago
- Straits Times
Several US executives to visit China this week: Sources
Find out what's new on ST website and app. A high-level delegation of American executives will travel to China this week to meet senior Chinese officials. BEIJING - A high-level delegation of American executives will travel to China this week to meet senior Chinese officials in a trip organised by the US-China Business Council (USCBC), two sources with knowledge of the visit told Reuters on July 28. The visit coincides with the latest round of US-China trade negotiations in Sweden , where China's Vice-Premier He Lifeng is meeting US officials from July 27 to July 30 for a new round of economic and trade talks. The delegation will be led by FedEx Chief Executive Rajesh Subramaniam, the council's board chair, one of the sources briefed on the trip said. The South China Morning Post first reported the visit on July 27, saying that executives from firms including Boeing would be part of the delegation. Reuters could not confirm other CEO members of the delegation or which Chinese officials they would meet. Boeing declined to comment on the trip and deferred to USCBC. The US government was not involved in the organisation of the visit, one of the sources said. The trip comes as Beijing and Washington work towards a summit between the two countries' leaders later in 2025, probably around the time of the Apec forum in South Korea October 26 - November 1, sources previously told Reuters. USCBC did not respond immediately to a request for comment. The business lobby previously organised similar visits to China by American CEO delegations in 2023 and 2024. The 2024 trip, also led by Mr Subramaniam, included meetings with Mr He and Foreign Minister Wang Yi, where executives discussed issues including market access. China faces an August 12 deadline to reach a durable deal with the White House or risk higher US tariffs. US officials are likely to extend the deadline by another 90 days as both sides work towards a more comprehensive deal, sources previously told Reuters. An extension of that length would prevent further escalation and help create conditions for the potential meeting between Mr Trump and Chinese President Xi Jinping. REUTERS
