According to the report released by CPCA on September 9th, the retail sales of passenger cars in China totaled 1.905 million units in August, a year-on-year decrease of 1.0% but an increase of 10.8% compared to the previous month. The cumulative retail sales from January to August reached 13.472 million units, with a year-on-year growth of 1.9%. Among them, the retail sales of conventional fuel cars in August amounted to 0.87 million units, a decrease of 28% year-on-year. The market penetration rate of domestic new energy vehicles in August was 53.9%.

A retrospective of the passenger car market in China in August.

Retail sales: In August, the retail sales of passenger cars in China totaled 1.905 million units, a year-on-year decrease of 1.0% but an increase of 10.8% compared to the previous month. The cumulative retail sales from January to August reached 13.472 million units, with a year-on-year growth of 1.9%. Among them, the retail sales of conventional fuel cars in August amounted to 0.87 million units, a decrease of 28% year-on-year but an increase of 4% compared to the previous month. From January to August, the retail sales of conventional fuel cars reached 7.44 million units, a decrease of 15% year-on-year. The market penetration rate of domestic new energy vehicles in August was 53.9%.

With the further implementation of the scrappage policy and the introduction of local policies for replacing old vehicles, the national call to prevent overconsumption, and stabilization of terminal prices, consumer confidence in holding onto their money has improved, leading to an overall recovery in the car market. As the energy structure of the new energy vehicle market changes, with a penetration rate surpassing 50% for the second consecutive month, the trend of the overall car market is gradually diverging from that of traditional fuel vehicles. The market for new energy vehicles saw increased activity in August, continuing the strong trend of the second half of the year.

Affected by factors such as high temperatures and heavy rainfall in recent months and the off-season for some industries, the manufacturing PMI for August fell to 49.1%, indicating a decline in business conditions. However, on July 25th, the National Development and Reform Commission and the Ministry of Finance issued the "Several Measures to Support Large-scale Equipment Upgrades and Replacement of Consumer Goods". The new subsidy standards for scrappage and replacement of vehicles were increased. The new subsidy standards for purchasing new energy passenger cars were set at 200,000 yuan, while the subsidy for purchasing 2.0-liter and below displacement fuel passenger cars was set at 150,000 yuan. Due to the 5,000 yuan advantage of scrappage and replacement subsidies for new energy vehicles over fuel vehicles, consumer enthusiasm for the new energy vehicle market has been further stimulated, resulting in strong growth in entry-level pure electric vehicles and narrow-range plug-in hybrids.

The number of scrappage and replacement applications has grown significantly in recent months. According to the latest data from the National Platform for Scrappage and Replacement of Vehicles, as of 10 a.m. on August 31st, more than 800,000 applications for scrappage and replacement subsidies have been received. Based on this, it is estimated that the daily number of new scrappage and replacement applications in the second half of August exceeded 133,000, fully reflecting the positive effect of the scrappage and replacement policy. Wholesale sales of new energy vehicles by manufacturers in August were significantly lower than retail sales, indicating a better-than-expected upward trend in terminal sales of new energy vehicles.

Characteristics of the passenger car market in August: 1) A 17% month-on-month increase in the retail sales of new energy vehicles in August, reflecting positive market feedback to the national scrappage and replacement policy; 2) The domestic retail penetration rate of new energy vehicles reached 54% in August, an increase of 16.7 percentage points compared to August 2023, reaching a record high penetration rate; 3) Divergent trends between wholesale and retail sales, and manufacturers' efforts to stabilize production and reduce inventory to achieve better circulation ecology; 4) Overall growth in export momentum has slowed slightly, but the export of new energy vehicles in August increased by 23% year-on-year, outperforming the cumulative export growth rate from January to August (20%) by about 3 percentage points, indicating a significant rebound in the export of new energy vehicles; 5) Mainstream domestic automakers continue to rise, while new players show different performances, indicating the need to accelerate the electrification of international brands.

In August, the retail sales of domestic independent brands reached 1.2 million vehicles, an increase of 21% year-on-year and 14% month-on-month. The domestic retail market share of independent brands in the same month was 63.4%, an increase of 11.4 percentage points year-on-year; the cumulative market share of independent brands in 2024 was 58%, an increase of 7.8 percentage points compared to the same period last year. The wholesale market share of independent brands in August was 66.9%, an increase of 9.4 percentage points year-on-year; independent brands achieved significant increases in both the new energy and export markets. Leading traditional automotive companies have performed well in their transformation and upgrading, with significant increases in market share for traditional automotive brands such as BYD (01211), Chery Automobile, Geely Automobile (00175), and Changan Automobile (000625.SZ).

In August, the retail sales of mainstream joint venture brands reached 0.48 million vehicles, a decrease of 27% year-on-year and an increase of 7% month-on-month. The market share of German brands in August was 16.6%, a decrease of 3.5 percentage points year-on-year, while the market share of Japanese brands was 12.6%, a decrease of 4.2 percentage points year-on-year. The market share of American brands reached 5.7%, a decrease of 2.9 percentage points year-on-year.

In August, the retail sales of luxury cars reached 0.22 million vehicles, a decrease of 21% year-on-year and an increase of 3% month-on-month. The market share of luxury brands in August was 11.6%, a decrease of 3 percentage points year-on-year, reflecting a noticeable decline in the retail market share of traditional luxury cars.

Exports: The overall automobile export performance this year continues the strong growth trend of the previous year. Using the statistics of passenger vehicle manufacturers: In August, the export of passenger vehicles (including complete vehicles and CKD) reached 0.413 million vehicles, an increase of 24% year-on-year and 9% month-on-month; the cumulative export of passenger vehicles from January to August reached 3.04 million vehicles, an increase of 30% year-on-year. In August, new energy vehicles accounted for 24% of the total export volume, remaining steady compared to the same period last year. With the recovery of markets such as South America, the export of independent brands reached 0.333 million vehicles in August, an increase of 17% year-on-year and 8% month-on-month; joint ventures and luxury brands exported 0.08 million vehicles, an increase of 20% month-on-month.

Production: In August, the production of passenger vehicles reached 2.158 million vehicles, a decrease of 3.7% year-on-year and an increase of 8.9% month-on-month. The production of passenger vehicles in August decreased by approximately 0.09 million vehicles compared to the historical peak in the same period in 2023. The production of luxury brands in August decreased by 5% year-on-year and 1% month-on-month; the production of joint venture brands decreased by 28% year-on-year and increased by 12% month-on-month; the production of independent brands increased by 8% year-on-year and 10% month-on-month.

Wholesale: In August, the total wholesale volume of passenger vehicle manufacturers across the country reached 2.154 million vehicles, a decrease of 3.9% year-on-year and an increase of 9.6% month-on-month. Due to the cautious production and sales strategies of automobile companies in the summer, wholesale of passenger vehicles in August did not reach a new high. Independent car companies wholesaled 1.44 million vehicles in August, an increase of 12% year-on-year and 9% month-on-month. The wholesale of mainstream joint venture car companies was 0.46 million vehicles, a decrease of 30% year-on-year and an increase of 12% month-on-month. The wholesale of luxury cars was 0.25 million vehicles, a decrease of 15% year-on-year and an increase of 5% month-on-month.

In August, the overall wholesale performance of major passenger vehicle manufacturers was mixed, with BYD, Chery Automobile, Geely Automobile, Volkswagen, and Changan performing relatively well. In August, there were a total of 35 passenger vehicle manufacturers with sales of over 10,000 vehicles (32 in July, 34 in the same period last year), accounting for 96.8% of the overall market share. Among them, 4 saw year-on-year sales growth of over 50%, 5 saw growth of 10% to 50%, and 16 saw negative year-on-year growth. There were 27 passenger vehicle manufacturers with positive month-on-month growth in wholesale volume of over 10,000 vehicles, including 17 with an increase of over 10% month-on-month. Some independent and Japanese-Korean joint venture brands showed relatively strong month-on-month performance.

Inventory: Due to the relatively cautious production by manufacturers in August, reduced wholesale volume, there was a trend of monthly manufacturer production exceeding wholesale by 0.004 million vehicles, while monthly domestic wholesale was 0.17 million vehicles lower than retail, reflecting the trend of destocking in the off-season channels in August. This has significantly relieved the operational pressure on dealerships in the months of July and August, with a total improvement of 0.3 million vehicles in channel destocking. Due to the continued destocking trend of joint venture companies, overall production has been cautious recently, resulting in a decrease of 0.15 million vehicles in manufacturer inventory from January to August (compared to a decrease of 0.04 million vehicles in the same period last year). Overall, domestic channel inventory of passenger vehicles decreased by 0.62 million vehicles (compared to a decrease of 0.17 million vehicles in the same period last year).

New Energy:

In August, the production of new energy passenger vehicles reached 1.051 million units, an increase of 32.6% year-on-year and 12.7% month-on-month. From January to August 2024, the production was 6.572 million units, a year-on-year increase of 28.5%.

In August, the wholesale sales volume of new energy passenger vehicles reached 1.052 million units, an increase of 31.7% year-on-year and 11.4% month-on-month. From January to August 2024, the wholesale volume was 6.622 million units, a year-on-year increase of 30.2%.

In August, the retail sales of new energy passenger vehicles reached 1.027 million units, an increase of 43.2% year-on-year and 17.0% month-on-month. From January to August 2024, the retail sales were 6.016 million units, a year-on-year increase of 35.3%.

In August, the export volume of new energy passenger vehicles reached 0.099 million units, an increase of 23.7% year-on-year and 7.6% month-on-month. From January to August 2024, the export volume was 0.787 million units, a year-on-year increase of 20.1%.

1) Wholesale: In August, the wholesale penetration rate of new energy vehicles increased by 13.3 percentage points to 48.9% compared to the penetration rate of 35.6% in August 2023. In August, the penetration rate of new energy vehicles in independent brands was 63%; the penetration rate of new energy vehicles in luxury cars was 43.2%; and the penetration rate of new energy vehicles in mainstream joint ventures was only 7.8%.

In August, the wholesale sales volume of pure electric vehicles was 0.592 million units, an increase of 6.6% year-on-year and 17.3% month-on-month. The wholesale sales volume of plug-in hybrid vehicles narrowed in August to 0.345 million units, an increase of 84% year-on-year and 9% month-on-month. The wholesale volume of extended range vehicles in August was 0.115 million units, an increase of 109% year-on-year, but a decrease of 6% month-on-month. In the wholesale structure of new energy vehicles in August, pure electric vehicles accounted for 56%, plug-in hybrids accounted for 33%, and extended range vehicles accounted for 11%. In August 2023, the structure of wholesale new energy vehicles was 70% pure electric vehicles, 24% plug-in hybrids, and 7% extended range vehicles. In the overall structure of wholesale new energy vehicles in 2023, pure electric vehicles accounted for 69%, plug-in hybrids accounted for 23%, and extended range vehicles accounted for 8%. Extended range vehicles effectively alleviate the range anxiety of pure electric vehicles and should be considered as a branch of pure electric vehicles.

In August, the sales volume of B-segment electric vehicles was 0.216 million units, an increase of 31% year-on-year and 5% month-on-month, accounting for 37% of pure electric vehicle market share. The market for A00+A0-level economical electric vehicles in the pure electric vehicle market declined, with wholesale sales volume of A00-level at 0.097 million units, a year-on-year increase of 15% and a month-on-month increase of 17%, accounting for 16% of the pure electric vehicle market share, a 1% increase compared to the previous year; wholesale sales volume of A0-level at 0.131 million units, accounting for 22% of the pure electric vehicle market share, a decrease of 10% compared to the previous year; wholesale sales volume of A-level electric vehicles at 0.127 million, accounting for 22% of the pure electric vehicle market share, an increase of 2% compared to the previous year. There is a differentiation in the sales volume of electric vehicles in various levels, and the trend of consumer upgrade towards high-end is obvious.

In August, there were 16 models with wholesale sales volume of over 20,000 passenger vehicles (15 models last month): Model Y (56,309 units), BYD Song (53,786 units), Seagull (40,949 units), Seabed 06 (40,015 units), Qin L (40,011 units), BYD Qin (30,446 units), Model 3 (30,388 units), BYD Yuan (30,061 units), Langyi (26,186 units), Ruihu 8 (25,821 units), Boyue (25,622 units), L6 from Li Auto (24,897 units), Song L (23,007 units), Xingyue (22,376 units), Sagitar (21,251 units), Ruihu 7 (21,005 units). Among them, new energy vehicles rank among the top 8 in overall passenger vehicle sales (top 10 last month), with Langyi and other gasoline-powered main vehicle models showing some improvement in domestic performance.

2) Retail: In August, the domestic retail penetration rate of new energy vehicles was 53.9%, a 16.6 percentage point increase from the 37.3% penetration rate in the same period last year. In the domestic retail market in August, the penetration rate of new energy vehicles in independent brands was 75.9%; in luxury cars, it was 33.5%; while in mainstream joint venture brands, the penetration rate of new energy vehicles was only 8%. Looking at the monthly domestic retail market share, mainstream independent brand new energy vehicles accounted for 73% of the retail market share in August, an increase of 3 percentage points year-on-year; joint venture brand new energy vehicles accounted for 3.8%, a decrease of 1.4 percentage points year-on-year; emerging brands accounted for 16.0%, with brands like Xiaomi Motors driving a 2 percentage point increase year-on-year; Tesla accounted for 6.2%, a decrease of 2.8 percentage points year-on-year.

3) Export: In August, the export of new energy passenger cars was 0.099 million units, a year-on-year increase of 23.7% and a month-on-month increase of 7.6%. They accounted for 24% of passenger car exports, remaining stable compared to the same period last year; pure electric vehicles accounted for 80.8% of new energy vehicle exports, with core focus A0+A00 level pure electric vehicle exports accounting for 41% of new energy vehicle exports (compared to 79% in the same period last year). With the emergence of China's scale advantage in new energy vehicles and expanding market demand, more Chinese-made new energy brand products are increasingly being exported, gaining recognition overseas. Despite recent disruptions from some external countries, exports of independent plug-in hybrid vehicles to developing countries are growing rapidly, showing promising prospects. August's outstanding manufacturers in terms of exports include: BYD (30,451 units), Tesla China (23,241 units), SAIC Passenger Vehicles (5,128 units), Chery Automobile (4,472 units), SAIC-GM Wuling (3,427 units), Xpeng Motors (2,500 units), Great Wall Motors (2,394 units), NIO (1,489 units), Geely Auto (1,402 units), BMW Brilliance (967 units), Dongfeng Honda (953 units), Jiangsu Yueda Kia (950 units), Chongqing Sokon Industry Group (926 units), Dongfeng Automobile (871 units), JAC Motors (612 units). Other automakers also have a certain scale of new energy exports. Monitoring overseas retail data of independently exported brands shows that A0-level electric cars once accounted for nearly 50%, being the absolute main force of independent exports; independent brand small electric cars from companies like SAIC had strong performance in Europe earlier, leading to corresponding targeted tax measures, reflecting that small and micro electric cars are the core of the global electric vehicle competition. We urgently need tax policies to guide the development of small electric vehicles, encourage the development of small electric vehicles, and thereby make Chinese electric vehicles sustainable heading towards the world. As the counterpart to pure electric zero-carbon models, the category of fuel vehicles is facing a major trend of "oil-electric equality" in overseas markets, with independent plug-in hybrid models relying on low fuel consumption and long endurance gaining increasing ability to divert fuel vehicles in overseas markets.

4) Automotive Companies: In August, the overall trend of new energy passenger vehicle enterprises was strong, with BYD solidifying its leading position in new energy vehicles with both pure electric and plug-in hybrid drives; extended-range electric vehicles represented by Li Auto, Sokon Auto, Changan Auto, Leap Motor, and others performed exceptionally well. In terms of product launches, with the implementation of the "multiple strategies" in the new energy route by independent automotive companies, the market size continues to expand, and in August, the manufacturers with monthly wholesale sales exceeding ten thousand units reached 19 (an increase of 4 year-on-year and 2 month-on-month), accounting for 90.4% of the total passenger electric vehicle sales (up from 89.2% last month and 87.2% in the same period last year). Among them, BYD (370,854 units), Tesla (86,697 units) in China, Geely Auto (75,484 units), Changan Auto (49,398 units), Li Auto (48,122 units), Chery Automobile (43,074 units), SAIC-GM Wuling (41,514 units), Sokon (35,741 units), GAC Aion (31,772 units), Leap Motor (28,005 units), Great Wall Motors (24,769 units), Dongfeng Automobile (23,571 units), NIO (20,176 units), Xpeng (14,036 units), SAIC Volkswagen (13,510 units), FAW Hongqi (13,229 units), Xiaomi Motors (13,111 units), Volvo Asia Pacific (10,429 units), Leap to a new generation (10,001 units).

5) New Forces: In August, the market share of new forces was 16.0%, an increase of 2.1 percentage points year-on-year; companies like Leap Motor, Leap to a new generation, Zhiji, and other manufacturers showed strong year-on-year and month-on-month performance. Mainstream independent automobile companies are growing stronger in new energy vehicles, with BYD, Geely, Changan, Chery, and SAIC-GM Wuling showing strong performance and becoming the backbone of new energy vehicles. Among mainstream joint venture brands, North and South Volkswagen are leading, with SAIC Volkswagen and FAW Volkswagen collectively wholesaling 19,968 new energy vehicles in August, accounting for just over 50% of the mainstream joint venture pure electric market share, indicating that Volkswagen's firm strategy of electrification is beginning to show results. Volvo and GAC Toyota's new energy vehicles in August also saw substantial growth.

6) Conventional Hybrid: In August, wholesale sales of conventional hybrid passenger vehicles were 0.083 million units, a 1% year-on-year increase and a 15% month-on-month increase. Among them, FAW Toyota (32,216 units), GAC Toyota (31,796 units), Changan Ford (5,441 units), Dongfeng Honda (4,361 units), GAC Honda (4,121 units), Dongfeng Automobile (1,681 units), GAC Trumpchi (1,407 units), Geely Auto (1,107 units), Dongfeng Nissan (1,056 units); sales of independent brand hybrids are gradually increasing.