New Vehicle Sales in China Climb 15% in the First Three Weeks of July Compared to the Previous Year, Reaching a Total of 789,000 Units
China's Passenger Vehicle Sales Show Seasonal Slowdown in July
China's passenger vehicle sales have experienced a temporary slowdown in July, with both conventional and new energy vehicles (NEVs) feeling the impact.
From July 1 to 27, China's total wholesale sales of passenger vehicles reached 1.505 million units, marking a 17 percent year-on-year increase but a 25 percent decrease month-on-month. The retail sales for the same period stood at 1.445 million units, up 9 percent year-on-year but down 19 percent month-on-month.
NEVs, which have been a growth driver in the Chinese market, also saw a decrease in sales. Retail sales of NEVs from July 1 to 27 were 789,000 units, up 15 percent year-on-year but down 17 percent month-on-month. Wholesale sales of NEVs during the same period amounted to 816,000 units, showing a 17 percent year-on-year increase but a 20 percent decrease month-on-month.
The decrease in sales can be attributed to a broader slowdown in auto sales, as well as market dynamics such as intense competition and potential price wars. The NEV market, in particular, has seen increased competition with many domestic and foreign players vying for market share. This competition has led to prolonged price wars, which started to put pressure on profit margins and potentially dampened consumer purchasing enthusiasm.
While government incentives and trade-in programs have supported NEV demand earlier in the year, their effectiveness might be waning as 2025 progresses, contributing to the recent sales moderation.
Despite the short-term weakness, the overall trend for the year remains positive. So far this year, China's cumulative retail sales of passenger vehicles have reached 12.346 million units, up 11 percent year-on-year. For NEVs, cumulative retail sales have reached 6.258 million units, up 31 percent year-on-year. Similarly, cumulative wholesale sales of Chinese passenger NEVs have reached 7.264 million units, up 35 percent year-on-year.
The trend of auto production and sales slowing sequentially in Q3 aligns with this pattern. In the fourth week of July (July 21-27), China's daily retail sales of passenger vehicles averaged 66,611 units, up 5 percent year-on-year but down 30 percent compared to the same period last month.
Looking ahead, the auto industry in China is expected to continue its growth trajectory, with the ongoing shift towards NEVs and government support playing a key role. However, the short-term challenges posed by intense competition and market dynamics will need to be navigated carefully.
- China's Passenger Vehicle Sales Slump in July Despite New Energy Vehicle Growth
- China's Auto Sales Slump in July as Market Adjusts After Strong First Half
- Price Wars and Waning Incentives Affect New Energy Vehicle Sales in China
- The slump in China's passenger vehicle sales in July extends to both conventional and new energy vehicles (NEVs), with retail sales of NEVs down 17 percent month-on-month despite a 15 percent year-on-year increase.
- China's auto industry might be facing short-term challenges due to a broad slowdown in sales, as well as competition and potential price wars, with the retail sales of passenger vehicles and NEVs decreasing month-on-month in July, even as year-on-year growth remains positive.
