September, traditionally a peak sales month in China's auto market, failed to deliver the usual boost. According to the China Passenger Car Association (CPCA), retail sales of passenger cars in September totaled 1.618 million units, down 28% year-on-year and up only 5% from August. Cumulative sales for the first nine months reached 13.334 million units, a 21.7% decline. The drop was the steepest of any month this year.
Despite the overall slump, the market's structure shifted dramatically. Retail sales of gasoline vehicles nearly halved, while the penetration rate of new energy vehicles (NEVs) hit a record 67%, and NEV exports more than doubled year-on-year. The data, reported by the CPCA, underscores a rapid transition from internal combustion engines to electric power.
Domestic brands hold ground, joint ventures struggle
Domestic brands sold 1.13 million units in September, down 25% year-on-year but up 5% month-on-month, capturing a 69.8% retail share, up 2.8 percentage points. Their NEV penetration within domestic brands reached 84.5%, and they accounted for 64.5% of all NEV retail sales. Exports also surged, with domestic brands shipping 812,000 units, up 75% year-on-year.
Joint venture brands faced a tougher month, with retail sales of 310,000 units, down 36% year-on-year. German brands held a 12.2% share, down 2 percentage points; Japanese brands 10.7%, down 0.9 points; and American brands 6.3%, a slight increase of 0.5 points—the only joint venture group to gain share. Their gasoline vehicle sales fell 42% year-on-year, as high fuel prices eroded the appeal of traditional powertrains.
However, joint ventures are not retreating entirely. Their NEV retail sales grew 36% year-on-year, while domestic brands' NEV retail sales fell 19%. Joint venture NEV wholesale penetration reached 16.3%, and retail penetration 15.9%, with a retail share of 4.8%, up 1.6 percentage points.
NEV penetration hits record, gasoline collapses
NEV retail sales in September reached 1.084 million units, down 16.7% year-on-year but up 7.8% month-on-month. Wholesale sales hit 1.666 million units, up 11.3% year-on-year. The retail penetration rate hit 67%, up 9.1 percentage points year-on-year, while wholesale penetration reached 65.4%, up 12 points—both record highs. In other words, more than two out of every three cars sold in China were NEVs.
Gasoline vehicle retail sales fell 43% year-on-year, with pure gasoline models down 49%. The decline was broad-based: domestic brands' gasoline sales fell 47%, joint ventures 42%, and luxury brands 41%. High fuel prices were a key factor, with cumulative gasoline price increases of 2,375 yuan per tonne this year.
Within NEVs, the technology mix is shifting. In September wholesale, battery-electric vehicles (BEVs) totaled 1.126 million units, up 18.3% and accounting for 67.6% of the NEV total. Plug-in hybrids (PHEVs) were 423,000 units, down 0.1%, and range-extenders (EREVs) 117,000 units, down 4%. BEVs are strengthening, while PHEVs and EREVs are losing momentum.
By price segment, B-class BEVs (mid-size) sold 329,000 units wholesale, up 21%, while A00-class (mini) BEVs plunged 51% to 78,000 units, hit by subsidy policy changes. A0-class (small) BEVs grew 10% to 396,000 units, and A-class (compact) BEVs were 266,000 units, down 2 percentage points in share.
NEV exports were a bright spot, with 558,000 units shipped in September, up 163.5% year-on-year, accounting for 60.8% of all passenger vehicle exports. BYD led with about 176,000 NEV exports in the month, followed by Chery and Geely. Globally, China's NEVs held a 62% share of world sales from January to August, and 65.3% in August alone.
Looking ahead, the CPCA expects October sales to improve, with more working days and ongoing subsidies. However, the association's secretary-general Cui Dongshu cautioned that full-year recovery remains challenging, with December's decline expected to narrow to under 10%. The shift from gasoline to electric is accelerating, and China's auto market is in a transitional phase.
