Rao Da, Secretary-General of the National Passenger Vehicle Market Information Association, shared insights at the recent "National and Shanghai Automotive Market Information Conference & Symposium." He highlighted that August saw the passenger vehicle market remain in a low phase, with both production and sales figures remaining relatively stable. Domestic car sales rose by 11 units from the previous month, according to data from the association. In August, China produced 180,948 passenger vehicles and sold 183,792 units. Compared to July, this represented a slight decline of 0.27%, but a modest increase of 1.19% compared to the same period last year.
Domestic cars, which accounted for about 90% of total sales, saw only a marginal increase of 11 units over July, with the year-on-year growth rate dropping further to 0.11%. Rao attributed this to a stagnant market environment, continued tight monetary policies, and unchanged consumer attitudes toward car purchases. However, he expressed optimism that September could mark the beginning of a market recovery, driven by the upcoming "Golden Week" holiday. He estimated that passenger car sales in September might exceed 200,000 units, with around 180,000 being domestic models. Despite this, he cautioned that a strong rebound was unlikely, as September last year saw over 190,000 sedans sold, meaning this year's sales could experience a 4%-5% decline compared to the same period.
Rao also noted that the cumulative year-on-year growth for the domestic passenger car market may only reach 10%-12%. Additionally, it was revealed that 80% of car companies may fail to meet their annual sales targets due to the impact of macro-control measures on the automotive industry. Since February, the sales of domestic cars have shown a declining trend, forming a "saddle-shaped" pattern. With last year’s inventory of 197,400 units still on hand, only 300,000 units remain in the hands of manufacturers this year.
According to an official from the Shanghai Public Policy Research Office, the current round of macro-control has affected the auto industry through various channels, including restrictions on fixed asset investment, new industrial policies, vehicle overload rectification, the implementation of the "Road Traffic Safety Law," tighter bank credit, higher insurance premiums, and rising oil prices. These factors have led to a significant compression of dealer liquidity, with most dealers facing a 30% reduction in funds, and some even up to 75%.
At the same time, manufacturers have been pressuring dealers to stock up on inventory, leading to aggressive price cuts. For example, Shanghai Volkswagen dealers reduced prices by more than 10,000 yuan, Beijing Hyundai offered full-line discounts of 10%, and Jeep cut prices by 70,000 yuan to cope with the challenging market conditions.
Reporter: Lu Huimin
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