Shanghai (ZXZC)- In May 2024, China's domestic passenger vehicle (PV) market retailed 1.71 million vehicles, marking a year-over-year decrease of 1.9% but a month-over-month increase of 11.4%, according to data from the China Passenger Car Association ("CPCA").

For the first five months of this year, the country's PV retail sales totaled 8.073 million units, an increase of 5.7% compared to the same period last year.

For clarity, the passenger vehicles hereby refer to cars, MPVs, and SUVs locally produced on the Chinese Mainland.

In May, despite the impact of factors such as holiday shifts and a high base from the previous year, several positive influences emerged, including the implementation of the government's "trade-in" policy, the consumer enthusiasm driven by the Auto China 2024, the rollout of supportive policies across various regions, and a temporary cooling of the price wars in the car market. Additionally, the price protection and buyback policies alleviated consumer concerns, and the release of major products by leading companies stabilized product supply expectations. This combination of factors stimulated the purchasing enthusiasm of previously hesitant consumers, leading to a relatively positive development phase for the new energy passenger vehicle market in May.

According to the CPCA, China's car market witnessed an early onset of price wars this year, with discounts of nearly 20% on some popular models, extending from post-Chinese New Year in February through the end of April. The number of models involved in the price cuts nearly matched the total number of models discounted last year, leading to consumers adopting a wait-and-see attitude towards prices. Additionally, weak consumer expectations temporarily suppressed the spring market launch. However, with the implementation of detailed policies at the end of April, pent-up consumer purchasing power began to be released in May, propelling a strong market performance for new energy vehicles, exceeding the expectations of passenger car manufacturers. The new energy vehicle purchase tax exemption policy, set to exclude entry-level models under 200 kilometers starting June 1, also drove a rush to register vehicles before the policy change, further boosting the new energy vehicle market’s growth in May.

In May, PV retail sales of Chinese indigenous brands reached 980,000 units, rising 12% from both the previous year and month. Domestic brands captured a 57.6% share of the retail market that month, up 7.3 percentage points year-on-year. For 2024, Chinese local brands have accumulated a market share of 56%, an increase of 6.6 percentage points compared to the same period last year.

In May, mainstream joint-venture brands recorded retail sales of 490,000 units, a decrease of 21% year-on-year but an increase of 8% month-on-month. German brands held an 18.6% share of the retail market in May, down 2 percentage points year-on-year, while Japanese brands had a 14.8% share, down 3.2 percentage points year-on-year. Besides, American brands accounted for 6.7% of the market, a year-on-year dip of 1.4 percentage points.

Luxury car retail sales reached 240,000 units in May in China, down 3% year-on-year but up 19% month-on-month. The retail market share of luxury brands stood at 14% in May, a slight decrease of 0.2 percentage points year-on-year, indicating that the demand for traditional luxury cars was not particularly strong.

In May, PV manufacturers in China reported wholesale sales of 2.031 million units, marking a 1.2% year-on-year increase and a 3.9% month-on-month increase. Driven by market stabilization and export promotion, the sales in May exceeded the historical high of 2 million units recorded in May 2023 by 28,000 units.

China's local car manufacturers achieved wholesale sales of 1.298 million units in May, representing an 18% year-on-year increase and a 4% month-on-month increase. In contrast, mainstream joint-venture brands recorded wholesale sales of 480,000 units, a year-on-year decrease of 23% but a month-on-month increase of 3%. Luxury car brands saw wholesale sales of 260,000 units, a 9% year-on-year decline but a 5% month-on-month increase.

The overall performance of major passenger car manufacturers in May showed divergence. BYD, Chery Automobile, Geely Auto, and Changan Auto performed relatively well. There were 32 passenger car manufacturers with sales exceeding 10,000 units in May (the same as in April, compared to 30 in the same period last year), capturing 95.4% of the overall market share. Among these, 2 manufacturers achieved a year-over-year growth rate of over 100%, 10 manufacturers saw a growth rate of over 10%, and 17 manufacturers experienced negative year-over-year growth. Additionally, 20 manufacturers with wholesale volumes exceeding 10,000 units showed positive growth compared to April.

China's passenger car production output in May totaled 1.997 million units, showing a slight year-on-year increase of 0.3% and a month-on-month increase of 0.5%. However, production of luxury car brands decreased by 13% year-on-year and 3% month-on-month. Joint-venture brands saw a year-on-year production decline of 24% but a month-on-month increase of 2%. Besides, China's local brands saw production out grow by 18% year-on-year and edge up 1% month-on-month.

This year, China's overall automotive export performance has maintained the strong growth momentum seen at the end of last year. According to customs statistics, China exported 569,000 vehicles in May, a year-on-year increase of 30%, with export revenues reaching $10.5 billion, up 17% year-on-year. From January to May of this year, total vehicle exports reached 2.45 million units, up 27% year-on-year, with export revenues totaling $46.4 billion, an increase of 20% from a year ago.

According to data submitted by passenger car manufacturers, including both complete vehicles and CKD (completely knocked down) kits, China's PV exports in May totaled 378,000 units, a year-on-year increase of 23% but a month-on-month decrease of 9%. Cumulatively, from January to May, passenger car exports reached 1.87 million units, up 34% year-on-year. In May, new energy vehicles accounted for 24.8% of total exports, a decrease of 6.8 percentage points compared to the same period last year. With the recovery of markets in South America and other regions, exports of China's domestic brands reached 319,000 units in May, up 27% year-on-year but down 7% month-on-month. Exports of joint venture and luxury brands totaled 58,000 units, a 5% year-on-year increase.