NEVs expected to make up 53.2% of China’s Aug. passenger car sales: CPCA

Shanghai (Gasgoo)- The Chinese auto market is showing signs of recovery as the government's policy measures, including scrappage incentives and trade-in programs, gain traction. Following calls from the state to combat hyper-competition and stabilize prices, consumer hesitancy is easing, leading to a revival in overall market activity. This uptick in interest coincides with a shift in energy consumption patterns, with new electric vehicle (EV) penetration now surpassing 50%. As a result, the seasonal performance of the overall car market is diverging from the traditional patterns seen in gasoline-powered vehicles, with August maintaining robust market activity and defying typical off-season trends.

In August, retail sales of passenger vehicles in China are projected to reach approximately 1.84 million units, marking a 4.4% year-over-year decrease but a 7.0% increase from the previous month, according to the China Passenger Car Association ("CPCA"). Meanwhile, retail sales of new energy passenger vehicles (NEVs) are expected to hit around 980,000 units in the month, reflecting a significant 36.6% year-over-year growth and an 11.6% month-over-month rise, pushing the penetration rate to an estimated 53.2%.

For clarity, the passenger vehicles hereby refer to the cars, SUVs, and MPVs locally produced in the world's largest auto market.

Breaking down the month by weeks: the first week of August saw average daily retail sales of 41,000 units, a year-over-year increase of 2.2% and a 4.7% rise from the previous month, maintaining the high momentum observed at the end of July. During the second week, ongoing support from car trade-in policies propelled average daily sales to 51,000 units, up 9.6% year-over-year and 22.7% from the prior-month period. The third week saw a stable market performance, with daily sales averaging 55,200 units, an 8.1% year-over-year increase and a 15.8% month-over-month gain. In the fourth week, average daily sales are expected to reach 61,400 units, showing a year-over-year rise of 3.8% and an 8.7% increase from the previous month.

Considering that major automakers set conservative targets at the start of the month, some may not need to push aggressively in the fifth week to meet high sales goals. As a result, daily retail sales are anticipated to slow down to around 82,100 units, reflecting a year-over-year decline of 27.6% and a 5.9% decrease from the previous month.