May Sales of China’s Passenger Car Market Down 17% YoY

According to data released by the China Passenger Car Association (CPCA) on Wednesday, retail sales of the domestic passenger car market in May totaled 1.354 million units, down 17% year-on-year and up 30% month-on-month. Total sales of passenger car manufacturers nationwide was 1.557 million units, down 3% year-on-year and up 64% month-on-month.

In the first week of June this year, overall retail sales in the passenger car market reached an average of 34,000 vehicles per day, down 5% year-on-year. The performance gradually recovered, increasing by 6% compared with the average number in the first week of May.

The CPCA pointed out that several car market stimulus policies released by local government authorities can promote the recovery of the auto market to a certain extent. These policies can support the recovery of sales volume, but consumers are generally in no hurry to buy cars during the start-up period of the policies, and the most obvious effect is in the exit period of the policies in the fourth quarter. In other words, the current sales volume meets trend expectations of the policies.

The sales volume of new energy vehicles (including ordinary hybrid vehicles) from January to April was 3.75 million, specifically those equipped with hybrid powertrain, reached 1.17 million, accounting for 31%. In 2022, the global trend of new energy passenger cars is strong, reaching 2.56 million vehicles from January to April, up 73% year-on-year. In April 2022, the sales volume was 540,000 vehicles, up 37% year-on-year.

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According to analysis by the CPCA, the reason for the strong sales performance of new energy vehicles in 2022 is the effective pull of market demand and the policy-driven shift to marketization. Under the influence of COVID-19, European and American new energy policies have strong support. In 2020, European new energy vehicles performed well. In 2021, China accounted for 52% of the world’s new energy vehicles. Due to a downturn of the European new energy vehicle market amid the continuing pandemic and Russia’s invasion of Ukraine, China’s vehicle sales volume returned to a high level of 57% in 2022. China now drives the global market mainly because its new energy vehicle industry has turned to marketization, forming strong endogenous growth momentum.

In addition, from January to April, the sales volume of hydrogen fuel cell vehicles was 463, showing a relatively low trend. Moreover, hydrogen fuel vehicles still showed a negative growth of 3% year-on-year.