China’s locally-made passenger vehicle retail sales likely to rise 4.7% YoY in Aug. 2023: CPCA

Shanghai (Gasgoo)- China's domestic passenger vehicle ("PV") retail sales are anticipated to reach 1.85 million units in August 2023, which should edge down 1.3% from the previous year, but still climbed 4.7% from the previous month, according to the China Passenger Car Association ("CPCA").

Of the PVs retailed in China in July, around 700,000 units were expected to be new energy vehicles (NEVs, referring to battery electric vehicles and plug-in hybrid electric vehicles), representing a 9.2% growth month-on-month and a 31.5% jump year-on-year, and also indicating a 37.8% penetration rate.

For clarity, the passenger vehicles mentioned here are all locally produced on the Chinese mainland.

Nonetheless, the automotive market has had to navigate the challenges posed by extreme rainfall in parts of Northern and Northeastern China at the end of July and the beginning of August. This led to a minor 0.8% year-on-year dip in daily average sales during the first week of August, with a daily average of 40,100 units. The subsequent weeks saw a gradual market recovery, reaching a daily average of 49,100 units by the second week, showcasing a 12.6% year-on-year surge. In the third week, the growth rate steadied, with a daily average of 51,900 units, reflecting a 2.9% year-on-year increase.

Looking ahead, the post-"818 Shopping Festival" deliveries in the fourth week are expected to stimulate the market slightly, raising the daily average to an estimated 60,700 units, marking a 4.4% year-on-year rise. The fifth week, however, is projected to see a daily average of 128,200 units, signifying a 14.7% decline compared to the same period last year.

Recent findings from the China Automobile Dealers Association indicate a comprehensive inventory coefficient of 1.70 in July, indicating a substantial 25.9% month-on-month and 17.2% year-on-year increase. As dealers prepared for the high-temperature break in August, their efforts contributed to a marginal rise in overall inventory levels. The third quarter remains a pivotal juncture for manufacturers as they strived to fulfill their annual targets. With the continuation of incentives from various manufacturers in August, bolstered by car expos and the "818 Shopping Festival," the supply side of the market remains robust. Furthermore, the surge in sales of newly introduced products in the new energy vehicle market, coupled with an increasing number of second-half launches, provides strong support for the market in August and beyond, said the association.