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In May, China’s retail car sales experienced a significant decline of 22% compared to the previous year, primarily due to a sharp drop in fuel-powered vehicle sales, despite a record-high adoption rate of new energy vehicles (NEVs).
According to data released yesterday, approximately 1.51 million passenger vehicles were sold through retail channels last month, representing a 9.2% increase from April. However, sales of traditional fuel cars fell by 39% year-over-year, making up 82% of the total decline in retail sales.
Persistently elevated fuel prices have dampened consumer demand for gasoline and diesel vehicles, accelerating the transition toward electric cars. Despite retail sales slipping 7.5% to 950,000 units, NEV adoption reached 62.9%. Wholesale figures for NEVs also climbed by 11%, reaching 1.35 million units, with a penetration rate of 61%.
Exports of vehicles, including complete units and knock-down kits, surged by 75%, totaling 784,000 units and accounting for 35% of total automaker sales. NEV exports jumped 113% to 424,000 units, while domestic brand shipments increased by 83%, reaching 682,000 units.
Leading retail sales were dominated by BYD, followed by Geely Auto and Changan Automobile. These three Chinese automakers saw declines of 29%, 17%, and 32%, respectively, translating to sales of 207,000, 169,000, and 92,000 units. Leapmotor was the only EV startup to make it into the top ten, with sales soaring 48% to 61,000 units.
Joint-venture brands showed signs of progress in electrification, with retail NEV sales rising 51% and their wholesale penetration rate increasing to 15%. In contrast, domestic NEV retail sales fell by 10%, influenced by subsidy reductions on subsidized electric vehicles and a slowdown in the micro vehicle market.
Looking ahead to this month, industry analysts expect the market to continue its pattern of monthly recovery but face ongoing year-over-year challenges. The improvements seen toward the end of the first half and steady NEV adoption are expected to support a month-over-month rebound. However, limited domestic demand and high fuel prices are likely to restrict substantial growth compared to last year.
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