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Our reporter Yin Limei and Tong Haihua reported from Beijing

"From the production and sales data, the overall performance of the automobile industry in July was not particularly good, with a certain decline both year-on-year and month-on-month. The reason for the decline in production and sales in July was not only the lack of consumer confidence, but also the frequent natural disasters such as floods and geological disasters this year, which also affected the sales of the automobile industry."

On August 9, the China Association of Automobile Manufacturers (hereinafter referred to as "CAAM") held an information release conference. Chen Shihua, deputy secretary-general of CAAM, made the above statement at the press conference. In addition, he believes that the auto market entered the traditional off-season in July, some manufacturers took a high-temperature holiday, and the production and sales rhythm slowed down, which is also one of the reasons for the relatively flat performance of the overall market.

A reporter from China Business News learned from the China Association of Automobile Manufacturers that in July, my country's automobile production and sales reached 2.286 million and 2.262 million respectively, down 8.8% and 11.4% month-on-month, and down 4.8% and 5.2% year-on-year respectively.

From January to July, my country's automobile production and sales reached 16.179 million and 16.31 million respectively, up 3.4% and 4.4% year-on-year respectively. The growth rates of production and sales narrowed by 1.5 and 1.7 percentage points respectively compared with January to June.

New energy vehicles become the mainstream of the market

"We see that from January to July 2024, the sales volume of the automobile industry increased by 4.4% year-on-year, which is higher than the year-on-year growth data expected at the beginning of the year. At the beginning of the year, we expected that the sales volume of the automobile industry this year would increase by 3% year-on-year. In 2023, since July, automobile production and sales have shown sustained growth. There are still five months left this year, and the pressure on the automobile industry to achieve year-on-year growth is still very high." Chen Shihua told reporters.

The performance of automobile exports is better than that of the domestic market. The reporter noted that in the first seven months of 2024, domestic automobile sales were 13.048 million units, a year-on-year decrease of 0.3%; during the same period, China's automobile exports were 3.262 million units, a year-on-year increase of 28.8%. In July, domestic automobile sales were 1.793 million units, a month-on-month decrease of 13.3% and a year-on-year decrease of 10.1%; during the same period, automobile exports were 469,000 units, a month-on-month decrease of 3.2% and a year-on-year increase of 19.6%.

From the perspective of the domestic market, in July, sales of both passenger cars and commercial vehicles showed a year-on-year decline.

Among them, in July, domestic sales of commercial vehicles were 198,000 units, a month-on-month decrease of 22.5% and a year-on-year decrease of 10.3%.

In terms of passenger cars, domestic sales of passenger cars in July were 1.595 million, down 12% from the previous month and 10.1% from the previous year. Fuel vehicles have become the direct cause of the sharp decline in the passenger car market. In that month, domestic sales of traditional fuel passenger cars were 742,000, down 383,000 from the same period last year, down 16.9% from the previous month and down 34.1% from the previous year.

In July, the sales volume of new energy passenger vehicles in China reached 853,000 units, with a penetration rate of 53.5%, surpassing the market share of fuel vehicles for the first time. This means that in the terminal sales of passenger vehicles, new energy vehicles have become the mainstream of the market.

The reporter noticed that from January to July, sales of traditional fuel passenger cars in all market levels showed a decline to varying degrees. The current sales of traditional fuel passenger cars are still mainly concentrated in Class A models (compact models), with cumulative sales of 4.624 million units, a year-on-year decrease of 9.5%.

During the same period, the current sales of new energy passenger vehicles are mainly concentrated in A-class and B-class models, with sales of 1.853 million and 1.83 million respectively, a year-on-year increase of 8.7% and 61.3% respectively.

It can be seen that in the passenger car market, new energy vehicles not only seize the market share of traditional fuel passenger cars in the A-class car market, but also pose a greater threat to traditional fuel passenger cars in the B-class car market.

From the perspective of price segments, from January to July 2024, the sales of traditional fuel passenger cars are still mainly concentrated in the price range of 100,000-150,000 yuan, with a total sales of 2.816 million vehicles, a year-on-year decrease of 8.8%. The reporter noted that except for the positive growth in the price ranges of 150,000-200,000 yuan and 400,000-500,000 yuan, the sales of traditional fuel passenger cars in other price ranges have declined year-on-year.

During the same period, sales of new energy passenger cars were mainly concentrated in the price range of 150,000 to 200,000 yuan, with a total sales of 1.554 million units, a year-on-year increase of 13.8%. Except for the price ranges below 80,000 yuan and 400,000 to 500,000 yuan, sales of new energy passenger cars in other price ranges showed positive growth.

Overall, compared with traditional fuel vehicles, new energy vehicles still maintain a good growth momentum.

In July, the production and sales of new energy vehicles reached 984,000 and 991,000 respectively, up 22.3% and 27% year-on-year, and the sales of new energy vehicles accounted for 43.8% of the total sales of new vehicles. From January to July, the cumulative production and sales of new energy vehicles reached 5.914 million and 5.934 million respectively, up 28.8% and 31.1% year-on-year, and the sales of new energy vehicles accounted for 36.4% of the total sales of new vehicles.

Plug-in hybrid models continue to be popular in the market. In July, pure electric models sold 551,000 units, up only 2.6% year-on-year; plug-in hybrid models sold 438,000 units, up 80.7% year-on-year. From January to July, pure electric models sold 3.57 million units, up 10.1% year-on-year; plug-in hybrid models sold 2.361 million units, up 84.5% year-on-year.

"The main growth driver of the new energy vehicle market this year comes from plug-in hybrid vehicles. This type of vehicle can be powered by either oil or electricity and has a wide range of usage scenarios. At present, many companies have launched plug-in hybrid vehicles including extended-range vehicle models. There is a relatively large supply of plug-in hybrid vehicles on the market, and the prices have also dropped to a certain extent. The cost-effectiveness is relatively high, so it is favored by consumers." Chen Shihua said.

It is worth noting that a few days ago, the National Development and Reform Commission and the Ministry of Finance issued "Several Measures to Strengthen Support for Large-Scale Equipment Updates and Trade-in of Consumer Goods", proposing to support the scrapping and renewal of old operating trucks, increase the subsidy standards for new energy buses and power battery renewals, and increase the subsidy standards for scrapping and renewal of cars.

Chen Shihua believes that the policy strength of the above document is significantly enhanced compared with the implementation details of the old-for-new exchange released on April 24, and both passenger cars and commercial vehicles will receive subsidies. "The policy increase at the national level will further release the replacement demand in the existing market. In addition, the continuous launch of new products by automakers, and the multi-level measures of some local governments such as relaxing purchase restrictions and increasing issuance quotas will help achieve the expected goals for the whole year."

Fuel vehicles are still the main export products

Exports remain a bright spot in China's auto market. In terms of my country's auto exports, the scale of passenger cars is much larger than that of commercial vehicles. Judging from the data in July, the performance of both passenger cars and commercial vehicles in the export market is remarkable.

According to data released by the China Association of Automobile Manufacturers, in July, 399,000 passenger cars were exported, up 22.4% year-on-year; 70,000 commercial vehicles were exported, up 5.8% year-on-year. From January to July, 2.738 million passenger cars were exported, up 30.1% year-on-year. 524,000 commercial vehicles were exported, up 22.6% year-on-year.

Although the market share of fuel vehicles in the domestic market has been continuously squeezed by new energy vehicles, fuel vehicles currently play a more important role in the competition for overseas markets.

Data released by the China Association of Automobile Manufacturers showed that in July, the export volume of traditional fuel vehicles was 366,000, a year-on-year increase of 25.7%; the export volume of new energy vehicles was 103,000, a year-on-year increase of 2.2%. From January to July, the export volume of traditional fuel vehicles was 2.554 million, a year-on-year increase of 34.6%; the export volume of new energy vehicles was 708,000, a year-on-year increase of 11.4%.

It can be seen that on the export side, fuel vehicles are still the main products of Chinese car companies entering overseas markets.

The international development of new energy vehicles in my country is still in its infancy. According to data released by the China Association of Automobile Manufacturers, in July, my country exported 77,000 pure electric vehicles, a year-on-year decrease of 16.7%; 27,000 plug-in hybrid vehicles, a year-on-year increase of 1.9 times. From January to July, 554,000 pure electric vehicles were exported, a year-on-year decrease of 4.6%; 154,000 plug-in hybrid vehicles were exported, a year-on-year increase of 1.8 times.

Chen Shihua said that my country's new energy vehicle exports have been treated unfairly and irrationally, which has affected my country's auto exports. He believes that my country's new energy vehicle products are highly competitive and are also needed by consumers in overseas markets.

Although facing resistance from trade frictions and other aspects, the industry's attitude towards China's new energy vehicles entering overseas markets remains relatively positive.

Zhang Yichao, partner of AlixPartners' Greater China automotive consulting business, said in an interview with reporters that cost advantage is the confidence and premise for Chinese brands to continue to go abroad. Chinese electric vehicle manufacturers have a strong motivation to expand overseas to seek more growth, make full use of resources and expand economies of scale. Recently, discussions about electric vehicle tariffs are expected by Chinese electric vehicle manufacturers. Although the tariff policies of the United States or Europe will create obstacles for Chinese electric vehicle manufacturers in market expansion, they will inevitably promote the localization of Chinese automakers' automobile assembly business in major export markets such as Southeast Asia, Mexico and Europe.

Zhang Yongwei, vice chairman and secretary-general of the China Electric Vehicle 100 Forum, believes that by 2030, China's automobile exports are expected to exceed 10 million vehicles, of which new energy vehicles will account for more than half.

Dr. Stephen Dyer, partner and managing director of AlixPartners, co-head of Greater China and head of automotive and industrial products consulting business in Asia Pacific, told reporters that although the growth rate of China's pure electric vehicle exports will slow down due to EU tariff restrictions, it is expected that China's automobile exports will grow further in 2024. Europe's tariff restrictions focus on the field of pure electric vehicles, and in other powertrain automobile fields, Chinese automobiles will continue to go global.

(Editor: Zhang Shuo, Reviewer: Tong Haihua, Proofreader: Yan Jingning)