Cango Newsletter 20240222

Date: 2024-02-22

Cango Newsletter 20240222


Cango (NYSE: CANG) is a leading automotive transaction service platform in China, connecting dealers, financial institutions, car buyers, and other industry participants. Follow us on Twitter ( for updates.


Below please find our latest Cango newsletter. Our goal is to share the most newsworthy articles in today’s macro economy, auto industry, as well as our recent developments. Below please find the abstract and news link for more details.

Macro Economy

1. China Unveils 2023 Economic Data, Growth Momentum Remains for 2024

China unveiled a multitude of economic data directly following the Spring Festival holiday. In 2023, China maintained basic equilibrium in the balance of payments, with foreign investment exhibiting an overall net inflow. China's trade with Africa stood at US$282.1 billion. The proportion of loans to small and micro enterprises continues to increase year by year. China is also set to test a pilot preferential stamp duty policy for offshore trade starting April 2024. Looking ahead to 2024, the underlying trend of China's economic fundamentals remains unchanged, featuring recovery, resilience, and long-term growth. [Link]

2. Spring Festival in the Year of the Dragon: 474 Million Domestic Trips Across China

The Ministry of Culture and Tourism has released the cultural and tourism market data for the 2024 Spring Festival. The 8-day holiday saw a staggering 474 million domestic trips nationwide, marking a 34.3% year-over-year increase and a 19.0% rise compared to the same period in 2019 on a comparable basis. Total spending on domestic trips reached RMB632.687 billion, reflecting a 47.3% year-over-year surge and a 7.7% increase compared to the same period in 2019 on a comparable basis. Consumer enthusiasm for both domestic and international tourism once again soared to record highs during the 2024 Spring Festival holiday. [Link]

3. China’s LPR Poised for Sensible and Moderate Decline, Bolstering Financial Support for the Real Economy

To maintain reasonable and ample liquidity within the banking system, on February 18, 2024, the People's Bank of China conducted 105 billion yuan of reverse repos at an interest rate of 1.8%, while maintaining the rate on 500 billion yuan worth of one-year medium-term lending facility (MLF) loans to certain financial institutions at 2.5%, unchanged from previous operations on both cases. Industry experts suggest that going forward, it would be prudent to further diminish the correlation between the loan prime rate (LPR) and MLF rate. Reducing financing costs for real economy participants plays a greater role in economic growth than MLF rate, underscoring LPR’s significance in this regard. Moreover, any potential reduction of LPR hinges on the possibility of reducing bank funding costs, which in turn depends largely on deposit costs. Notably, major Chinese banks have lowered deposit rates four times since 2022, creating further room for LPR reductions and fostering greater banking support for the real economy. [Link]

Automobile Market

1. January 2024 Auto Exports Surge Over 40% YoY, Sustaining Rapid Growth Trajectory

According to a February 19, 2024 analysis by the China Association of Automobile Manufacturers, China's automobile exports surged over 40% year-over-year in January 2024, sustaining a rapid growth trajectory. In January 2024, automobile exports reached 443,000 units, down 11.2% from December 2023 but up 47.4% year-over-year. Specifically, passenger vehicle exports totaled 369,000 units, down 12.4% sequentially but up 47.5% year-over-year while commercial vehicle exports amounted to 74,000 units, down 4.9% sequentially but up 46.9% year-over-year. In terms of traditional and new energy vehicles (NEV), traditional ICE vehicle exports totaled 343,000 units, down 11.6% sequentially but up 57.1% year-over-year, while NEV exports reached 101,000 units down 9.8% sequentially but up 21.7% year-over-year. [Link]

2. Spring Festival Auto Shopping Sentiment Dampens

Automotive demand during the 2024 Spring Festival holiday season cooled for an array of reasons. First, the 2024 Spring Festival differed slightly from previous years in terms of timing, placing the extended 8-day holiday amid warmer weather in mid-February. While people are always eager to celebrate, compared with the past four years, this year was characterized by greater motivation and energy to attend family reunions and travel during the Lunar New Year. In addition, buying a car is becoming increasingly convenient, with vehicle models undergoing more frequent iterations and releases than ever before. Consequently, purchasing a car during the Spring Festival holiday is no longer a pressing necessity. Consumers now have the flexibility to browse, purchase, and collect their vehicles anytime, anywhere, dispersing the demand traditionally associated with the concentrated "peak sales season" throughout the year. [Link]

3. Chinese EV Maker HiPhi Suspends Production and Operations for Six Months

HiPhi announced a 6-month suspension of production and operations on February 18, 2024. Internal leaks revealed that after March, HiPhi employees will only receive minimum standard basic living expenses, totaling just over two thousand yuan. This outcome was not entirely unexpected, as leaks before the Spring Festival holiday suggested that “all HiPhi operations would be suspended, get ready to sue,” and multiple employee benefits, including meal subsidies, were canceled. At the time, HiPhi responded categorically that such information was “not true.” However, amidst a torrent of negative news, HiPhi’s response seems feeble and ineffective in reversing the company’s downward trend. [Link]

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