In May, new energy vehicle retail sales increased by 38.5% year-on-year, and the

As the policy implementation details were released at the end of April, the price war for new car models in the automotive market cooled down temporarily. The accumulated consumer purchasing power was released in May, and the Passenger Car Association (PCA) expects the car buying enthusiasm to continue in June, with a potential for a good increase on a month-on-month basis.

On June 11th, the PCA released the market analysis report for passenger cars in May. In May, the national passenger car market retailed 1.71 million vehicles, a year-on-year decrease of 1.9%, and a month-on-month increase of 11.4%. The cumulative retail for the year reached 8.073 million vehicles, a year-on-year increase of 5.7%.

In May, the retail of new energy vehicles (NEVs) was 804,000 units, a year-on-year increase of 38.5%, and a month-on-month increase of 18.7%. The export of NEVs in May was 94,000 units, a year-on-year decrease of 4.0%, and a month-on-month decrease of 18.8%. The domestic retail penetration rate of NEVs in May was 47.0%, an increase of 14 percentage points from the 33% penetration rate of the same period last year.

The PCA pointed out that:

In May, the national economy operated stably. Although affected by factors such as the shift of holidays and a high base in the same period last year, the implementation of the national "trade-in" policy, the Beijing Auto Show stimulating consumer enthusiasm, the introduction and follow-up of corresponding policies and measures in various regions, along with the temporary cooling of the price war for new car models in the market, and the further alleviation of consumer concerns through price protection and repurchase policies, have all contributed to a stable supply of products.

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The release of significant products by leading companies has stimulated the enthusiasm of consumers who were waiting and observing the market, leading the national NEV passenger car market into a relatively better stage of development in May.

Furthermore, the PCA stated that exports continued the strong growth trend from the end of last year, with a 30% year-on-year increase in May to 569,000 units; manufacturers' inventory was adjusted steadily. Due to cautious production by manufacturers in May, but with a recovery in retail, there was a trend of manufacturers' production being 30,000 units lower than wholesale, indicating a destocking movement.

In the NEV sector, the production and sales of NEV passenger cars increased in May, while exports declined slightly:

In May, the production of NEV passenger cars reached 881,000 units, a year-on-year increase of 31.0%, and a month-on-month increase of 9.9%.In May, the new energy vehicle (NEV) market retailed 804,000 units, a year-on-year increase of 38.5%, and a month-on-month increase of 18.7%.

In May, NEV exports were 94,000 units, a year-on-year decrease of 4.0%, and a month-on-month decrease of 18.8%.

The domestic retail penetration rate of NEVs in May was 47.0%, an increase of 14 percentage points from the 33% penetration rate of the same period last year.

Looking at the monthly domestic retail share, in May, the retail share of mainstream domestic brand NEVs was 71%, a year-on-year decrease of 2.1 percentage points;

The share of joint venture brand NEVs was 4.5%, a year-on-year decrease of 0.1 percentage point;

The share of new force brands was 16.3%, with brands such as Xiaomi Automobile driving a year-on-year increase of 3.5 percentage points in the new force share; Tesla's share was 6.4%, a year-on-year decrease of 0.5 percentage points.

In terms of exports, the Passenger Car Association (PCA) stated that although there has been some interference from external countries recently, the long-term outlook for the NEV export market remains positive and promising:

From the monitoring of overseas market retail data of domestic brand exports, A0-level electric vehicles account for nearly 50%, which is the absolute main force of independent exports. Brands like SAIC have shown strong performance in Europe in the early period, while BYD has emerged in markets such as Southeast Asia and South America.

In addition to the impressive performance of traditional export car companies, the export of new force brands has also gradually increased recently, and data from overseas markets has begun to emerge.

Furthermore, according to the PCA report, from January to April 2024, global car sales reached 28.36 million units, and global new energy vehicles reached 4.49 million units. The global NEV penetration rate from January to April 2024 reached 15.8%, with the penetration rate of pure electric vehicles reaching 10.4%, and plug-in hybrids achieving a penetration rate of 5.4%.From January to April, the automobile industry's profit margin was 4.6%, with increased operational pressure on companies: In April, as macroeconomic policy measures were implemented in detail and market demand continued to recover, the effects were continuously evident. From January to April 2024, the automobile industry's revenue was 3,074.2 billion yuan, a year-on-year increase of 8%; costs were 2,688.2 billion yuan, an increase of 8%; profits were 142.8 billion yuan, a year-on-year increase of 29%; the profit margin of the automobile industry was 4.6%, which is still relatively low compared to the average profit margin of 5% for the entire industrial enterprise sector.

From January to April 2024, the automobile industry had relatively good production and sales under a low base, but due to intense competition, profits were mainly derived from exports and high-end luxury segments, with most other companies experiencing a sharp decline in profits and some facing increased survival pressures.

Domestic effective demand is still insufficient, and the external environment remains complex and severe, so the foundation for the recovery of industrial enterprise benefits needs to be further consolidated. Although fuel vehicles are still profitable, the market is shrinking rapidly; new energy vehicles are growing rapidly, but they suffer from significant losses, creating a significant contradiction that increases operational pressure on companies.

The Passenger Car Association (PCA) mentioned that in May, the new product price war in the car market has cooled down in a phased manner, and the price protection buyback policy further dispels user concerns. In response to the current fierce "price war" phenomenon in China's automobile industry, PCA Secretary-General Cui Dongshu stated:

From January to May 2024, nearly 60 electric vehicles have reduced prices, which is indeed a rare price war. The background of the "price war" is the decline in raw material prices for new energy vehicles, the rapid introduction of new energy vehicle models, and the penetration rate of new energy vehicles exceeding 40%.

The price war is a manifestation of systemic capabilities and an inevitable stage in industry development. After May, the "price war" has shown a trend of slowing down. Next, the domestic automobile market is expected to return to a normal state dominated by promotions, and it is unlikely to see situations where prices are reduced by 20% at the drop of a hat.

In June, the enthusiasm for car purchases is expected to continue, achieving better growth on a month-over-month basis. Looking ahead to June, the PCA anticipates the continuation of the enthusiasm for car purchases:In June of this year, there are a total of 19 working days, which is two days less than the 21 working days last year, making it less favorable for the semi-annual sales sprint in June. As the passenger car market enters the semi-annual closing period, the desire of various regions and car manufacturers to strive for sales performance is very strong. The delivery volume of new models, accompanied by the improvement of the manufacturing enterprise system capabilities, quickly releases production capacity to seize the leading opportunity, therefore June is still a month with a relatively good sales trend.

The number of college entrance examination (Gaokao) candidates in 2024 is 13.42 million, setting a historical record high, which will also bring a surge in driving and tourism after the Gaokao, benefiting the continuous strength of the car market in June. With the improvement of the experience of the third space of smart new energy vehicles and the stable expectation of the comprehensive cost of use, the popularity of self-driving tours this summer is expected to increase again, and personalized, low-cost travel methods such as private car self-driving have become the choice of more people.

The spring new car price reduction wave has ended, and the distribution of Beijing's electric vehicle license plates at the end of May, along with the promotion of the replacement and renewal, together drive the continuation of the car purchase heat in June.

The Passenger Car Association also mentioned that the continued downturn in conventional fuel car consumption is an important factor in suppressing the comprehensive recovery of the car market. This time, policies such as replacement and renewal reasonably ensure the replacement needs of the fuel car consumer group, which is of great significance to the stable development of the car market. The country's overall consideration and detailed grasp of the current "promoting consumption and boosting domestic demand" is becoming increasingly clear and accurate, and the market's "elimination and renewal" and "replacement and renewal" consumption potential will gradually be released, which is beneficial to the car market gradually strengthening in the next few months.

In terms of exports, the Passenger Car Association expects to maintain a good upward momentum:

From January to May 2024, the export of Chinese independent brand cars in overseas local markets increased by 57% year-on-year, among which the overseas retail of independent car exports in May increased by 57% year-on-year, continuing to maintain a strong growth trend. It is judged that the export of Chinese passenger cars in June will still maintain a good upward momentum, which will promote the total domestic and foreign sales volume of passenger cars in June to continue to increase on a month-on-month basis.