China's passenger car market is expected to recover in September, with retail sales projected to reach about 1.69 million units, a 9.7% increase from August, according to the China Passenger Car Association (CPCA). However, the figure represents a 24.6% decline compared with the same month last year, when sales hit an exceptionally high base of 2.241 million units.
The CPCA, a Shanghai-based industry body, said its latest survey of major automakers, which account for more than 70% of total market sales, showed their retail targets for September were less than 10% higher than in August, weaker than the typical seasonal surge seen at the end of a quarter. Automakers have become more rational in their expectations and are less aggressive in pushing sales than in previous years, the association noted.
New energy vehicles to lead growth
New energy vehicles (NEVs) are expected to deliver around 1.11 million units in September, driven by new model deliveries and quarter-end sales pushes, according to the CPCA. That would put the retail penetration rate for NEVs at 65.7%, meaning nearly two out of every three passenger cars sold in China this month will be battery-electric (BEV), plug-in hybrid (PHEV) or range-extender (EREV) models.
The association's weekly breakdown shows a steady improvement in retail sales throughout the month. In the first week, the market was still recovering, with average daily retail sales of 35,000 units. The second week saw the start of promotional campaigns by various brands, lifting daily sales to around 44,000 units. In the third week, promotions expanded across the board, and deliveries of recently launched models began, boosting daily sales to an estimated 56,000 units.
The fourth week, which included the Mid-Autumn Festival holiday, saw orders improve further, though fewer working days meant deliveries were pushed back, with daily sales estimated at 70,000 units. In the fifth week, the combination of pre-National Day demand and quarter-end sales pushes is expected to drive daily retail sales to 96,000 units, marking the quarter's peak.
Context and outlook
The September forecast comes amid a broader slowdown in China's auto market, which has been affected by economic uncertainty and a price war among automakers. The year-on-year decline of 24.6% reflects the unusually high sales volume in September 2023, when the market was boosted by government incentives and a wave of new model launches.
Despite the overall market contraction, the sustained growth of NEVs highlights the ongoing shift in consumer preference toward electrified vehicles. The CPCA's data underscores the resilience of the NEV segment, which continues to gain share even as the overall market faces headwinds.
