According to the Zhitong Finance APP, Cui Dongshu, secretary-general of the China Passenger Car Association, stated that the main reason for the continuous negative growth of passenger car retail from April to June is the unexpected weakness in the year-on-year decrease of 25% in fuel vehicles. In June, the growth rate difference between new energy vehicles and fuel vehicles was maintained at 55%. In June, the domestic retail penetration rate of new energy vehicles reached 48.5%, an increase of 13.6 percentage points compared to the same period last year, which was 34.9%.

Cui Dongshu said that the demand for automobile production will steadily increase in 2024, social consumption expectations will continue to improve, and high-quality development will be solidly promoted. The automobile industry will continue to improve with a good upward trend. In June, the operation of the national economy was stable. With the implementation of the national policy of "replacing the old with the new", the enthusiasm of consumers was stimulated by the discounting of new cars, the launch of corresponding policy measures and follow-up in various places, the phase of the new car price war cooled, and the policy of price guarantee and repurchase further dispelled users' concerns. The release of heavyweight products by leading enterprises drove the stable expectation of product supply. The consumption enthusiasm of the market observation group in the early stage was stimulated. The national new energy passenger car market entered a relatively good development stage in June.

Cui Dongshu pointed out that the price war of this year started early, and some popular models had a discount of nearly 20%. The time span from the Spring Festival in February to the end of April was large, and the number of models involved in the price reduction was close to the number of models reduced throughout the year last year. Therefore, consumers had an extreme wait-and-see attitude towards prices, and weak consumer expectations temporarily suppressed the start of the spring car market. With the introduction of the detailed rules for the implementation of the policy of "replacing the old with the new", the accumulated purchasing power of consumption was released in June, which promoted the red June market of new energy vehicles, which was better than the expected trend of the passenger car manufacturer prediction team. The quality of the continued incremental increase of the new energy market in June was relatively high due to the exclusion of the purchase tax preferential policy for entry-level models, such as micro electric vehicles below 200 kilometers.

The characteristics of the passenger car market in June: 1. The main reason for the continuous negative growth of retail sales from April to June is the unexpected sluggishness of the year-on-year decrease of 25% in fuel vehicles, and the growth rate difference between new energy vehicles and fuel vehicles in June is maintained at 55%; 2. The domestic retail penetration rate of new energy vehicles in the second quarter continued to rise by 13 percentage points year on year, and the retail penetration rate of new energy vehicles in June reached 49%; 3. Fuel vehicles lack new product support. The promotion intensity of fuel vehicles increased significantly from the previous month, and the price promotion of new energy vehicles fell due to new products and price reductions. 4. The characteristics of destocking in the industry in June are becoming increasingly apparent. The structural adjustment pressure is spreading faster from the host plant to the channel end, and dealers have continued operating concerns. 5. Fuel vehicles in the passenger car export market grew by a strong 31% year on year in June, while new energy vehicle exports decreased by 12%. The performance of fuel vehicles in the overseas market is much stronger than that in the domestic market.

Retail trends for narrow passenger cars in recent years

The domestic retail sales of passenger cars in the first half of 2024 showed a continuous upward trend from March to June, with national retail sales of 1.76 million in June, up from 0.07 million units in March. The retail market was strong throughout 2023, with sales exceeding that of March in May and June, which was a good sign of strength, but last year's June exceeded that of March by 0.3 million units, so the trend of strength within the year is weak.

The national retail sales of passenger cars in June was 1.762 million units, down 7% year on year and up 3% from the previous month. The accumulated retail sales this year was 9.83 million units, up 3% year on year.

Due to Chinese New Year's Day in 2023 being the earliest in this century, the retail performance at the beginning of 2024 was strong, mainly due to the base effect. The growth in June was weak, but it gradually became stronger month on month, and there is still potential for a good recovery in growth in the future.

Wholesale sales trends for narrow passenger cars in recent years.

In June, passenger car manufacturers' wholesale volume was 2.17 million units, down 3% year on year and up 7% from the previous month. Due to the stagnation of overall passenger car exports and the negative growth of retail sales of joint ventures, the wholesale volume of passenger cars in June did not reach a new high.

In June, passenger car manufacturers' wholesale volume was 2.17 million units, down 3% year on year and up 7% from the previous month. The main growth of wholesale this year was due to the Spring Festival factor in the first quarter.

Production trends for narrow passenger cars in recent years.

In June, the production of passenger cars was 2.13 million units, down 3% year on year and up 7% from the previous month. Passenger car production in June was 0.08 million units less than the historical peak in the same period in 2022.

From January to May, 9.44 million passenger cars were produced, up 7% year on year, and 2.13 million units were produced in June, down 3% year on year. A total of 11.58 million were produced from January to June, up 5% year on year. The production capacity of passenger cars is currently super strong, but it is relatively restrained from January to June. In June, some major enterprises adjusted production strongly to stabilize inventory, ensuring that the inventory of the dealership system was balanced. Especially with the trend of the U.S. Federal Reserve raising interest rates and the downward trend of upstream resources prices, the production and sales of new energy vehicles were relatively cautious.

Monthly Changes in Production, Sales, and Inventory for Narrow Passenger Cars.

Due to the relatively cautious production of manufacturers in June but the push for wholesale, the trend of channel addition inventory at the end of the half year with a deviation of 0.03 million units was formed. As joint venture car companies continue to destock, the recent overall production is cautious. In the first half of the year, manufacturer inventory decreased by 0.17 million units (down by 0.07 million units from the same period last year), and domestic channel inventory decreased by 0.33 million units (down by 0.14 million units from the same period last year).

Promotion trends for narrow passenger cars.

Promotion of electric vehicles has gradually reached a high level. The promotion has continued to increase in the past few months, with a particularly significant increase in the promotion of electric vehicles from February to May. However, in June, because price-cutting models have become block orders, the promotion temporarily declined, and the current promotion level is at the historical median level. Product structure, 10-30 billion yuan products operating income of 401/1288/60 million yuan respectively.

Promotion trends of various vehicle series are relatively differentiated, with joint venture enterprises having greater promotion efforts. The promotion of independent gasoline vehicles has gradually caught up recently. The promotion efforts of European and Korean vehicles have been particularly strong recently.

The intensity of promotion by joint venture car companies continues to increase, and the trend in June this year is particularly strong, with market pressure sharply increasing.

Although consumption upgrade has driven strong demand for high-end vehicles, due to the diversion of new energy funds, the promotion of deluxe vehicles continues to increase to 23.2%, reaching a historical high level.

The promotion of independent vehicle enterprises has been relatively stable over the past few months. Since promotions of new energy vehicles by independent manufacturers are smaller than gasoline vehicles, exports have increased as a proportion, thus overall promotions are relatively stable.

The market trends of the various series of joint venture car companies are polarized, with weak performance by European and Korean series, the largest block orders, and small early performance by Japanese series, but noticeable growth in recent periods.

6. Characteristics of narrow passenger vehicle growth at all levels.

In June 2024, the retail growth rate of passenger vehicles was slightly lower than wholesale. Due to the weakness of rbob gasoline vehicles, the proportion of demand for passenger cars in June declined. Passenger car retailing was lower than SUV retailing in June, with high-end B-class and above passenger cars performing well in the passenger car segment, A00-class passenger car sales rebounding, but A0-class passenger car sales suffering greater losses.

The high-end SUV market is strong, with B-level and C-level SUVs showing strong year-on-year growth.

7. National growth characteristics of narrow passenger vehicles by country.

In June, mainstream joint venture brands had a retail volume of 0.48 million, a year-on-year decrease of 27% and a month-on-month decrease of 1%. In June, the German brand's retail share was 18.6%, a year-on-year decrease of 2.6 percentage points; the Japanese brand's retail share was 14.3%, a year-on-year decrease of 3.5 percentage points; the American brand's market retail share reached 6.3%, a year-on-year decrease of 2.9 percentage points.

Independent brands have gained significant increments in the new energy and export markets. Head traditional car companies have performed well in transformation and upgrading, and the market share of traditional car company brands such as Chery, Geely, BYD, Changan, and Great Wall has increased significantly.

8. Characteristics of brand production and sales in 2024.

In June, the national passenger car market had a retail volume of 1.762 million, a year-on-year decrease of 7% and a month-on-month growth of 3%; passenger car exports (including complete vehicles and CKD) had a volume of 0.378 million, a year-on-year increase of 28% and a flat month-on-month; passenger car production was 2.13 million, a year-on-year decrease of 3% and a month-on-month increase of 7%.

In June, the wholesale volume of passenger car manufacturers nationwide was 2.17 million, a year-on-year decrease of 3% and a month-on-month increase of 7%.

Trend of new energy fund penetration rate-wholesale.

In June, the wholesale penetration rate of electric vehicles by manufacturers was 45.3%, an increase of 11.4 percentage points from the penetration rate of 33.8% in June 2023.

In June, the penetration rate of self-owned brand new energy vehicles was 60.7%; the penetration rate of new energy vehicles in deluxe cars was 34.4%; and the penetration rate of new energy vehicles in mainstream joint venture brands was only 7.4%.

In June, the wholesale of traditional vehicles decreased by 21% year-on-year, while the retail of new energy vehicles increased by 29% year-on-year, with a difference in growth rate of 50 percentage points and greater pressure on rbob gasoline vehicles.

10. National penetration rate of new energy - retail.

In June, the domestic retail penetration rate of electric vehicles was 48.5%, an increase of 13.6 percentage points from the penetration rate of 34.9% in the same period last year.

In June, the penetration rate of new energy vehicles in self-owned brands was 72.5%; the penetration rate of new energy vehicles in deluxe cars was 29.8%; and the penetration rate of new energy vehicles in mainstream joint venture brands was only 7.4%.

In June, the retail of traditional vehicles decreased by 27% year-on-year, while the retail of new energy vehicles increased by 28% year-on-year, with greater pressure on rbob gasoline vehicles due to heavier taxation.