- The CPCA expects China's May NEV retail sales to rise 12.0% month-on-month, with the penetration rate hitting a record 62.5%.
- Showroom traffic and orders for traditional ICE vehicles drop significantly, exacerbating divergence with the NEV market.
China's retail sales of new energy vehicles (NEVs) are estimated at 950,000 units in May, the China Passenger Car Association (CPCA) said in a report on Friday.
That represents a 12.0% increase from the previous month, with the NEV penetration rate expected to reach about 62.5%, surpassing the previous record high of 61.4% logged in April.
The latest survey results show that major automakers, which account for more than 70% of total passenger car sales, have raised their retail targets for this month by about 10% compared to the previous month, the CPCA said.
The growth margin is considered in line with normal seasonal trends and provides a relatively positive early signal for a mild recovery in the broader auto market.
Based on preliminary estimates, China's overall passenger car retail sales for May will stand at 1.52 million units, up 9.9% from April, the CPCA said in the report.
Average daily retail sales for major automakers in the first week of May stood at 31,000 units, up 25.8% from the same period in April but down 25.7% from a year earlier.
In the second week, average daily retail sales reached 51,000 units, a sharp increase of 42.6% from the same period in April but down 17.0% year-on-year, driven primarily by a post-Labor Day holiday delivery bump.
As orders from the May Day holiday were gradually fulfilled, the market pulled back in the third week, with average daily retail sales at 39,000 units, up 7.1% from the same period in April but down 25.8% year-on-year.
The CPCA expects average daily retail sales in the fourth week to be 43,000 units, down 12.1% from the same period in April and 27.9% lower year-on-year.
Average daily sales for the fifth week are projected at 77,000 units, down 5.1% from the same period in April and 15.9% lower year-on-year.
Consumers remain highly cautious about big-ticket spending, and the market's wait-and-see sentiment has yet to ease, keeping the auto market in a weak recovery channel, the CPCA said.
During the May Day Golden Week holiday, automakers actively rolled out new model launch incentives and promotional campaigns, which boosted overall enthusiasm in the car market, according to the CPCA.
Deliveries of brand-new models launched around the Beijing Auto Show are gradually beginning, providing support for the NEV market in May.
However, as post-holiday limited-time subsidies expire, showroom traffic has naturally declined, causing the market to exhibit a front-loaded trend for the whole of May, the CPCA said.
The production ramp-up of new cars and accelerated deliveries are pushing the market penetration rate of NEVs into a highly visible growth channel.
In contrast, post-holiday showroom traffic and orders for traditional internal combustion engine (ICE) vehicles have dropped significantly, further exacerbating the polarization in market performance with NEVs.
