Domestic passenger car production hits record high in May

On June 11, the China Passenger Car Association (CPCA) released its May national passenger car market analysis report, showing that passenger car production reached 1.997 million units that month, a 0.5% month-over-month increase and 7,000 units higher than the historical peak of 1.99 million units in the same period of 2023, setting a new record high. Domestic brand production remained the main driver of year-over-year growth, increasing by 18%, while joint venture brand production continued to decline year-over-year, with the latest drop reaching 24%. National passenger car retail sales rebounded that month, increasing by 11.4% month-over-month to 1.71 million units. The report noted that with the implementation of the national trade-in policy, a temporary cooling of the price war in the new car market, and the introduction of guaranteed buyback policies, consumer enthusiasm among those who had previously been on the sidelines was stimulated, leading to a relatively strong development period for the national new energy passenger vehicle market in May.

The report stated that relatively cautious production and a recovery in retail sales in May led to a destocking trend, with manufacturer production falling below wholesale by 30,000 units and domestic wholesale below retail by 60,000 units. Along with the steady adjustment of inventory, the structural changes brought about by the electrification shift to the domestic auto consumer market are also evolving. In May, the wholesale penetration rate of new energy vehicle manufacturers reached 44.2%, a 10 percentage point increase from the same period last year. Changes also occurred at the retail level, with conventional fuel-powered vehicle retail sales falling 23% year-on-year. A similar trend was reflected in the top ten auto brands. Joint venture automakers, once dominant thanks to their fuel-powered models, are struggling to recover from the recent retail sales slump. FAW-Volkswagen, SAIC Volkswagen, and GAC Toyota all saw double-digit year-on-year declines, with FAW Toyota, the weaker brand, having already fallen out of the rankings.

Among domestic brands, BYD's growth slowed compared to the previous month, but it still maintained its top position with a 15.7% market share. Chery and Geely maintained their previous month's high year-on-year growth of nearly 60% and over 30%, respectively. Specifically, for emerging car manufacturers, driven by strong sales performance from Xiaomi, NIO, Li Auto, and W&M, their retail share reached 16.3% that month, a year-on-year increase of 3.5 percentage points. In terms of powertrain types, pure electric vehicle wholesale sales still dominate, but extended-range models, primarily promoted by brands like W&M and Li Auto, are showing strong growth, with wholesale sales increasing by 105% year-on-year, far exceeding pure electric and plug-in hybrid models. Meanwhile, sales of electric vehicles are diverging across different model segments, reflecting a positive trend of consumption upgrading. Mid-size electric vehicle sales increased by 42% year-on-year in May, accounting for 36% of the pure electric market share. The market for small and micro-economy electric vehicles declined, with wholesale sales of small cars falling by 10 percentage points year-on-year.

Overall auto exports this year continued the strong growth seen at the end of last year, but new energy vehicle exports saw a rare decline in both year-on-year and month-on-month figures in May. In May, new energy vehicle exports totaled 94,000 units, a year-on-year decrease of 4.0% and a month-on-month decrease of 18.8%. This represented 24.8% of passenger car exports, also down 6.8 percentage points from the same period last year. The China Passenger Car Association (CPCA) noted that despite recent disruptions from external countries, the long-term outlook for the new energy vehicle export market remains positive. Due to the impact of the anti-subsidy investigation, China's new energy vehicle exports to Europe have slowed this year. Some manufacturers are targeting South America, where the industry base is relatively underdeveloped and market demand is steadily increasing. Companies such as BYD, Great Wall, Chery, and Nezha have already established presence in Brazil, the world's sixth-largest auto market.

An automotive marketing manager told Jiemian News that localization is a primary strategy for brands going global. Given the high altitude terrain of South America, these automakers are generally targeting chassis and suspension performance improvements, as well as increased power output. As the half-year draws to a close, automakers will be even more motivated to boost sales. Looking ahead to June, the report predicts that China's passenger car exports will continue to maintain strong growth. In the domestic market, the popularity of self-driving tours is likely to continue to grow this summer, promoting personalized, low-cost travel options such as private driving. Coupled with the end of the spring surge in new car price cuts and the boost from trade-in policies, this will continue to fuel the enthusiasm for car buying.

From Sina Auto

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