China Automobile Dealers Association: Passenger car retail sales in a narrow sense are expected to reach 1.85 million units in August 2023, and new energy vehicles are expected to reach 700,000 units

July auto market off-season is not slow

In July, the terminal sales volume remained at a high level due to the combined effects of short-term factors such as the transfer of some delivery orders in the previous period and high-intensity terminal discounts. In July, the narrow passenger car retail sales of the China Passenger Car Association reached 1.768 million units, which was a slight seasonal decline due to the high base of the purchase tax stimulus in the same period last year, down 2.7% year-on-year and 6.7% month-on-month. New energy vehicles reached 641,000 units, up 31.9% year-on-year, with a penetration rate of 36.3%, and both the growth rate and penetration rate were further improved.

The auto market remains hot in August

The number of damaged vehicles after the local rainstorm in early August was relatively small, and the impact on the overall auto market was limited. In August, the terminal continued its previous promotion efforts, and mainstream manufacturers launched a new round of price reduction promotions, which maintained stable support for the auto market. Driven by the "818 Car Buying Festival" and the Chengdu Auto Show at the end of the month, the auto market remained hot in August.

1. Manufacturer sales trends

The survey shows that the overall market discount rate for passenger cars in mid-August was about 18.0%, the same as at the end of July, and the terminal discount strength continued. The retail sales target of the leading manufacturers, which account for more than 80% of retail sales, increased by about 5.0% from the previous month and slightly decreased from last year. Preliminary estimates show that the narrow passenger car retail market this month is about 1.85 million vehicles, a month-on-month increase of 4.7% and a year-on-year decrease of 1.3%. New energy retail sales are about 700,000 vehicles, a month-on-month increase of 9.2% and a year-on-year increase of 31.5%, with a penetration rate of about 37.8%.

2. Weekly trend estimation

Affected by extreme rainfall in North China and Northeast China in late July and early August, the average daily retail sales of major manufacturers in the first week of August were 40,100, a slight decrease of 0.8% year-on-year. The auto market gradually recovered from the second week, and some demand suppressed by extreme weather was released, with an average daily sales of 49,100, a year-on-year increase of 12.6%. The growth rate of the auto market slowed down in the third week, with an average daily retail sales of 51,900, a year-on-year increase of 2.9%. After the "818 Car Buying Festival" in various places, terminals began to deliver. The heat of the auto market is expected to increase slightly in the fourth week, with an average daily retail sales of 60,700, a year-on-year increase of 4.4%. The average daily retail sales in the fifth week are expected to be 128,200, a decrease of 14.7% from the same period last year.

3. The auto market continued to be hot in August

Since July, residents have been very enthusiastic about traveling during the summer vacation, and the consumption of services such as cultural tourism and dining has improved significantly, supporting the spontaneous stabilization and recovery of the economy. From January to July, the total retail sales of consumer goods increased by 7.3% year-on-year, of which the total retail sales of automobile consumer goods increased by 5.5% year-on-year, with a narrower growth rate than the previous month. The recovery of sales of large consumer goods is still relatively slow. On July 24, the Political Bureau of the Central Committee made it clear that the difficulties and challenges facing the current economic operation are mainly insufficient domestic demand, and clearly proposed to boost major consumption such as automobiles, electronic products, and home furnishings. The policy of economic stabilization and growth continues to increase, and the economy will mainly play a bottoming role in the auto market this year.

The survey results of the China Automobile Dealers Association show that the comprehensive inventory coefficient of automobile dealers in July was 1.70, up 25.9% from the previous month and 17.2% from the same period last year. Dealers completed terminal restocking before the high-temperature holiday in August, and the overall inventory level increased. The third quarter is a key node for manufacturers to achieve their annual goals. In August, various manufacturers continued their previous preferential policies, and the auto show and the 818 car buying festival were superimposed, which provided strong support to the auto market from the supply side. The sales of new products launched in the new energy market in the second quarter continued to climb, and the main new products have begun to increase in volume. The number of new cars launched in the second half of the year was higher than that in the first half of the year, which provided strong support to the new energy vehicle market in August and even in the second half of the year in terms of product supply.

In summary, the retail sales of narrow passenger cars in August are expected to be 1.85 million units, a month-on-month increase of 4.7% and a year-on-year decrease of -1.3%. Among them, the retail sales of new energy vehicles are about 700,000 units, a month-on-month increase of 9.2% and a year-on-year increase of 31.5%, and the penetration rate is about 37.8%.