CPCA Expects China’s January Passenger Vehicle Sales to Fall Palpably on Overdrawn Consumption, Pandemic and CNY Holiday

On the evening of January 30, the China Passenger Car Association (CPCA) released its latest sales forecast. It is expected that the retail sales of passenger vehicles in the narrow sense will reach 1.36 million units in January in China, of which the retail sales of new energy vehicles are expected to be 360,000 units.

On the whole, in January this year, the momentum of the car market waned under the factors of overdrawn consumption, pandemic outbreak and early Chinese New Year holiday.

According to CPCA, the average daily retail sales of major manufacturers in the first and second weeks fell by 24% and 18% year-on-year respectively. The third week was the last week before the Chinese New Year. Affected by the holiday factor, it is expected that the average daily retail sales have been the same as the week before the CNY holiday last year, a drop of 65% compared with the same period last year. Taking into account the post-holiday recovery and the production rush of manufacturers at the end of the month, it is expected that the market might have rebounded in the fourth week, with a year-on-year increase of about 9%. Collectively, the retail sales in January may have been 1.36 million units, a year-on-year decrease of 34.6% and a month-on-month decrease of 37.3%.

The growth rate of the overall auto market has slowed, and the new energy vehicle (NEV) market, which continued to grow drastically last year, failed to bring more surprises. According to CPCA, the NEV retail sales in January are expected to reach 360,000 units, a year-on-year increase of 1.8% and a month-on-month decrease of 43.8%, with a penetration rate of 26.5%.

In December 2022, with the NEV subsidies expiring at the end of 2022, auto manufacturers actively promoted the delivery of vehicles, and the sales of NEVs hit a new high for the year. In December, retail sales of NEVs stood ta 640,000 units, an increase of 35.2% year-on-year and a month-on-month increase of 7%, with a penetration rate of 29.5%. Even if zoomed in to the entire 2022, the penetration rate of NEVs has reached 27.6%, which is higher than that in January 2023. It can be seen that due to factors such as the withdrawal of the state subsidy, the auto market did overdraw the consumer demand for new energy vehicles in January this year to a certain extent.