On June 10, the China Association of Automobile Manufacturers (CAAM) published data on the production and sales of domestically manufactured automobiles for May and the first five months of the year. According to the data, the domestic auto industry during this period exhibited a clear trend of "general stability, sluggish domestic demand, structural variations, and robust exports."

Declines Continue to Narrow, Signaling Stabilization

The data reveals that in May, automobile production and sales reached 2.616 million and 2.629 million units, respectively, showing month-on-month increases of 1.6% and 4.1%, while experiencing year-on-year decreases of 1.2% and 2.1%. The narrowing declines suggest signs of industry stabilization.

From January to May, automobile production and sales reached 12.235 million and 12.207 million units, respectively, marking year-on-year decreases of 4.6% and 4.2%. The declines continued to narrow compared to the first four months.

Domestic Demand Under Pressure, Exports Remain Strong

The CAAM highlighted that since the beginning of the year, the automobile market has demonstrated significant traits of "domestic demand under pressure and strong exports." Domestic sales in May amounted to only 1.7 million units, a year-on-year decrease of 20.4%, with the decline in domestic demand surpassing expectations. Conversely, automobile exports soared to 930,000 units, a year-on-year increase of 68.7%.

The auto industry is confronting numerous challenges, including insufficient domestic demand, high costs, and external shocks. Stabilizing domestic demand has emerged as a crucial task for the auto industry this year.

New Energy Vehicles and Domestic Brands Excel

1. New Energy Vehicle Penetration Nears 60%

In May, production and sales of new energy vehicles reached 1.554 million and 1.496 million units, respectively, showing year-on-year increases of 22.4% and 14.4%. The sales share of new energy vehicles (including exports) rose to 56.9%, setting a new historical record.

From January to May, production and sales of new energy vehicles were 5.841 million and 5.802 million units, respectively, with year-on-year increases of 2.5% and 3.5%, and a penetration rate of 47.5%. The CAAM anticipates that new energy vehicles will perform even better in the subsequent months compared to the first five months.

2. Domestic Brand Passenger Vehicle Sales Share Exceeds 70% for the First Time

Data indicates that from January to May, sales of domestic brand passenger vehicles reached 7.326 million units (including exports), with a sales share surpassing 70% for the first time, reaching 71%, a year-on-year increase of 2.2 percentage points. In May alone, the sales share hit 75%, maintaining this high level for two consecutive months, further solidifying its dominant market position.

3. High Export Growth Becomes the Standout Feature

Exports were the most prominent growth factor for automobile sales in May. Automobile exports reached 930,000 units, a year-on-year increase of 68.7%, maintaining a level above 900,000 units for two consecutive months.

From January to May, cumulative exports reached 4.059 million units, a year-on-year increase of 63%. The CAAM estimates that automobile exports in the first half of the year will approach 5 million units, exceeding expectations.

Data shows that exports of new energy vehicles were particularly remarkable. In May, exports of new energy vehicles reached 446,000 units, a year-on-year increase of 1.1 times, accounting for about 45%. From January to May, exports of new energy vehicles reached 1.833 million units, a year-on-year increase of 1.1 times, accounting for 45.15% of total automobile exports. Among them, export growth of plug-in hybrid models reached 124.5%, surpassing the 108.5% increase in battery electric models.

4. Commercial Vehicle Market Shows Steady Growth

Amidst pressure in the domestic passenger vehicle market, commercial vehicles emerged as a vital supporting force. In May, sales of commercial vehicles reached 376,000 units, a year-on-year increase of 12.5%, with both passenger buses and freight trucks achieving double-digit growth. From January to May, sales reached 1.888 million units, a year-on-year increase of 7.7%.

Domestic Market for Fuel-Powered Passenger Vehicles Shrinks Rapidly

Affected by the surge in oil prices due to Middle East conflicts, fuel-powered vehicles have cooled down. The domestic passenger vehicle market has displayed a differentiated trend of "cooling fuel-powered vehicles and heating new energy vehicles."

In May, domestic sales of fuel-powered passenger vehicles were only 497,000 units, a year-on-year decrease of 41.8%, a reduction of 357,000 units compared to the same period last year. From January to May, domestic sales of fuel-powered passenger vehicles were 3.203 million units, a decrease of 1.243 million units compared to the same period last year, marking a year-on-year decrease of 28%.

Currently, China's auto industry is undergoing a period of profound adjustment with accelerated transformation. Although domestic demand remains under pressure, the declines have gradually narrowed. The market penetration rate of new energy vehicles and the sales share of domestic brand passenger vehicles continue to rise, while high export growth compensates for the insufficient domestic demand.

The CAAM believes that on the consumption front, expectations should be stabilized and restrictive measures should be introduced cautiously. On the foreign trade front, internationalization should be deepened, and global operational capabilities should be enhanced to strengthen the resilience and stability of industrial development. (End)