The overall market is recovering at a slower pace than previously expected due to increased consumer wait-and-see sentiment caused by big price cuts, the CPCA said.
The China Passenger Car Association (CPCA) expects China's new energy vehicle (NEV) sales to continue to recover this month from last month, although growth in the overall passenger car market remains slow.
Retail sales of passenger vehicles in China are expected to be 1.59 million units in March, flat from a year ago and up 14.5 percent from February, the CPCA said in a report late last night.
Among them, retail sales of NEVs are expected to be 560,000 units, up 25.8 percent from a year ago and up 27.5 percent from February, with a penetration rate of 35.2 percent, according to the report.
In mid-March, the overall market discount rate for passenger cars in China was about 14.4 percent, up from 13.9 percent at the end of February, indicating intense price competition in sales channels, the report said.
The Chinese car market performed poorly in January-February amid multiple unfavorable factors, and demand began to be released in March, the CPCA said.
However, the overall market recovered at a slower pace than previously expected due to increased consumer wait-and-see sentiment caused by car companies' price-cut marketing, the report said.
Large discounts offered by car companies in Hubei province in early March attracted a lot of consumer attention, but at the same time led to a wait-and-see mood among consumers in other provinces and cities, the CPCA said.
Other local governments have since introduced subsidy policies and car brands have followed suit with promotions, which have boosted store traffic but limited actual order conversion, the CPCA said.
Consumer wait-and-see sentiment further increased, negatively impacting the auto market, the report said.
Average daily retail sales for major Chinese automakers in the first and second weeks of March were 31,500 and 36,700, down 16 percent and 18 percent year-on-year, respectively, according to the report.
Average daily retail sales in the third week are expected to be 40,800, up 10 percent year-on-year, mainly due to a low base from last year as a result of the Covid outbreak in the same period last year.
Considering the upward pulse of car sales at the end of the quarter and promotional policies in some regions, the auto market is expected to maintain its rebound in the fourth and fifth weeks, the CPCA said.
The CPCA usually releases estimates of passenger vehicle sales at the end of the month, with preliminary data released early the following month, followed by final data.
It estimated February NEV retail sales in China at around 400,000 units on February 22, released a preliminary figure of 438,000 units on March 7, and released a final figure of 439,000 units on March 8.