BEIJING: China's ultra-competitive car market contracted again last month as manufacturers led by BYD Co push exports to sidestep a fierce price war in the country.
Retail sales in the world's biggest auto market slumped 24% to 1.54 million units, the China Passenger Car Association said Tuesday.
Year-to-date sales are down more than a fifth as a persistent real estate crisis weighs on big-ticket spending.
Automakers in the country are looking to grow elsewhere to escape the pain.
Their exports jumped 78% to 888,000 vehicles last month, with overseas sales now accounting for 38% of the total, up from a fifth a year ago.
The figures underscore how international markets are now a vital business necessity.
Companies with sufficient scale and resources are gaining share in markets including Europe and South America, while brands relying solely on China's domestic consumers are under growing pressure.
BYD just lifted its target for overseas sales this year to as much as 2 million units, from 1.5 million previously.
The maker of the Dolphin sedan was the biggest exporter of new-energy vehicles from China in August, with over 184,000 sales abroad, PCA said.
Of the roughly 86,000 fully electric models Tesla Inc shipped from its Shanghai factory, some 36,000 went overseas.
Meanwhile, the aggressive discounting in China is inflicting severe financial damage across the auto sector. Industry profit margins fell to 3.6% during the first seven months of the year, PCA said.
That's well behind the 6.5% average returns across China's broader downstream industrial sector.
The development reflects a severe double squeeze on China's vehicle manufacturers, PCA said.
Automakers are caught between rising upstream expenses - with suppliers of non-ferrous metals and semiconductors able to charge higher prices - and a hyper-competitive domestic retail environment that requires continuous discounting to maintain volume.
