The new energy vehicle industry is slowing down, with Xi’an’s GDP growing by 2.7% in the first quarter

In addition to a relatively high base, the weakening of industrial belt momentum may be a more critical factor affecting the economic performance of Xi’an. Among them, the strong growth of the automotive manufacturing industry in the past two years actually dragged down in the first quarter of this year.

The GDP growth rate in the first quarter of last year ranked first among cities with a trillion yuan GDP. However, the growth rate in the first quarter of this year lagged behind, and Xi’an’s economy experienced a reversal.

On April 29th, the Xi’an Municipal Bureau of Statistics announced that the total regional GDP of the city in the first quarter was 288.286 billion yuan, a year-on-year increase of 2.7% at constant prices. Among them, the added value of the primary industry was 3.443 billion yuan, an increase of 3.2%; The added value of the secondary industry was 91.107 billion yuan, an increase of 1.9%; The added value of the tertiary industry was 193.736 billion yuan, an increase of 3.0%.

According to the first financial analysis, among the 21 trillion GDP cities that have already released first quarter economic data, Xi’an ranks last in terms of growth rate. Moreover, compared to the GDP of 283.411 billion yuan in the first quarter of 2023, Xi’an only increased by 4.875 billion yuan in the first quarter of this year, with a nominal growth rate of only 1.72%.

A relatively high base may be an important factor contributing to the poor economic growth rate in Xi’an. In the first quarter of 2023, Xi’an’s GDP grew by 7.6%, ranking first among 24 trillion yuan cities, with a growth rate 3.1 percentage points higher than the national average. In the first quarter of 2023, GDP increased by 19.608 billion yuan, while in the first quarter of this year, it only increased by 4.875 billion yuan.

More specifically, Xi’an’s indicators with lower growth rates in the first quarter of this year achieved high growth last year. For example, in the first quarter of 2023, the added value of industries above designated size, fixed assets investment (excluding farmers) and total retail sales of consumer goods in Xi’an increased by 11.6%, 8.0% and 10.1% respectively. However, in the first quarter of this year, they increased by 2.7%, -2.6% and 0.1% respectively.

In addition to the base, the weakening of industrial belt driving force may be a more critical factor affecting the economic performance of Xi’an. Among them, the strong growth of the automotive manufacturing industry in the past two years actually dragged down in the first quarter of this year.

According to the Xi’an Bureau of Statistics, in terms of industrial scale, the total output value of large enterprises has decreased by 8.8%. From the perspective of key industries, the total output value of computer, communication and other electronic equipment manufacturing increased by 10.8%, the total output value of automobile manufacturing decreased by 3.4%, and the total output value of railway, shipbuilding, aerospace and other transportation equipment manufacturing increased by 8.3%. Cars did not continue high growth but instead experienced negative growth.

By comparison, in the first quarter of 2023, the total output value of Xi’an’s equipment manufacturing industry increased by 16.4% year-on-year, and the contribution rate of the equipment manufacturing industry to the growth of industrial output value above designated size reached 80.3%, providing strong support for the city’s industrial economic growth. Among them, the automobile manufacturing industry has made a significant contribution, with its total output value increasing by 37.5%.

However, since last year, the driving force of the Xi’an automotive industry belt has gradually weakened.

Xi’an topped the list of “the city with the highest production of new energy vehicles” in 2022, but slipped to third place last year, with production not exceeding one million vehicles. According to official reports, the production of new energy vehicles in Xi’an in 2023 reached 983800 units, an increase of 25.9% compared to the previous year. In 2022, the production of new energy vehicles in Xi’an reached 1.0155 million units, a year-on-year increase of 277.5%.

Xi’an has not released data on the production of new energy vehicles in the first quarter of this year. However, the production of new energy vehicles in Xi’an accounts for over 90% of Shaanxi Province. According to the database of the National Bureau of Statistics, the production of new energy vehicles in Shaanxi in the first quarter of this year was 214300 units, compared to 225200 units in the first quarter of last year, a year-on-year decrease of 4.8%.

According to data from Shaanxi Automobile Industry Association, in the first quarter of this year, Xi’an BYD produced 193000 vehicles; Shaanxi Automobile produced 38000 trucks in the first quarter, a year-on-year increase of 10.4%; Xi’an Geely’s automobile production in the first quarter was 57000 units, a year-on-year increase of 5.4%; Baoji Geely’s automobile production in the first quarter was 43000 units, a year-on-year increase of 178.3%.

Feng Lei, Vice President of Huoshi Creative Industry Research Institute, previously stated in an interview with First Financial that one of the reasons for the decline of new energy vehicles in Xi’an last year was the diversion of BYD’s best-selling model production line. With the production and completion of new factories in Changzhou, Fuzhou, and Hefei, the production capacity of some best-selling car models in Xi’an has been diverted.

This situation may continue to affect Xi’an’s automobile production this year. Feng Lei also stated that there are not many new generation models at the Xi’an BYD base in 2024, and BYD’s new generation models are mainly concentrated in factories in Hefei and Zhengzhou. In addition, the designed production capacity of the BYD factory in Xi’an is 900000 vehicles per year, and the current production capacity has reached saturation.

However, although the overall data for the first quarter was poor, compared monthly, we can still see the driving force behind the economic recovery in Xi’an. The Xi’an Bureau of Statistics previously released that from January to February this year, the added value of industries above designated size increased by -6.1%, and the total output value of the automobile manufacturing industry increased by -17%. However, the two indicators from January to March have changed to 2.7% and -3.4%, indicating a significant rebound in the Xi’an economy in March.

According to Shaanxi Daily, as March approaches, the development momentum of the automotive industry in Shaanxi Province has significantly accelerated. In March, the province’s automobile production reached 140000 units, a year-on-year increase of 44.6%, which is 38.1 percentage points higher than the national average. The added value achieved a year-on-year increase of 29.7%, which is 20.3 percentage points higher than the national average. Among them, the production of new energy vehicles reached 94000 units, a year-on-year increase of 47%, which is 18.9 percentage points higher than the national average.

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