Passenger car market experiences "double growth" in august, september growth may slow

On the afternoon of September 8th, the latest data released by the China Passenger Car Association showed that in August of this year, the retail sales of the national passenger car market reached 1.995 million units, a year-on-year increase of 4.6% and a month-on-month increase of 8.2%. The cumulative retail sales from January to August reached 14.741 million units, a year-on-year increase of 9.5%.

Image Source: China Passenger Car Association

Cui Dongshu, the Secretary-General of the China Passenger Car Association, pointed out that the retail sales in August this year hit a new high, increasing by 3.7% compared to the historical highest level of 1.92 million in August 2023, showing a gradually steady growth trend.

Since the beginning of this year, the development trajectory of the passenger car market has generally shown the characteristics of "low at the beginning, high in the middle, and stable at the end." In the first two months of the year, the cumulative retail growth rate was only 1.2%, which was relatively low. As market demand gradually released and various consumption promotion policies took effect, the cumulative growth rate from January to June significantly increased to 11%, demonstrating strong growth momentum. In July and August, due to the high base from the same period last year, the growth rate slowed down, but still maintained positive growth, which is in line with market expectations.

Independent brands capture a 65.7% market share.

In the passenger car market in August, different segments showed a clear trend of differentiation. Domestic brands continued to maintain a strong leading position, while mainstream joint venture brands and luxury brands faced some growth pressure.

According to data released by the China Passenger Car Association, the performance of domestic brands was particularly outstanding in August. In that month, domestic brands sold 1.32 million units at retail, an increase of 9% year-on-year and 8.6% month-on-month. In terms of market share, domestic brands achieved a domestic retail share of 65.7% in August, an increase of 2.3 percentage points compared to the same period last year. Looking at cumulative data, from January to August, the retail market share of domestic brands was 64%, an increase of 6.2 percentage points year-on-year, further consolidating their market dominance.

The strong performance of independent brands is attributed to their first-mover advantage and rapid deployment in the new energy sector, as well as the continuous enhancement of their comprehensive competitiveness in product design, intelligent configuration, and cost-effectiveness. In recent years, independent brands have increased their investment in research and development, achieving significant breakthroughs in core areas such as battery technology, motor systems, and intelligent connectivity for new energy vehicles. The series of new products they have launched have been well received by consumers.

In stark contrast to independent brands, mainstream joint venture brands had a relatively flat performance in August. That month, mainstream joint venture brands sold 470,000 units at retail, a year-on-year decrease of 2% and a month-on-month increase of 2%. Specifically, the market share of German and Japanese brands declined. The retail market share of German brands in August was 14.2%, a year-on-year decrease of 2.4 percentage points; the retail market share of Japanese brands was 12.5%, a year-on-year decrease of 0.1 percentage points. American brands performed well, with a retail market share of 6%, showing a year-on-year increase of 0.2 percentage points. Korean and other European brands also saw slight growth in their retail market share, but their overall scale remains limited.

The growth pressure on mainstream joint venture brands mainly stems from their relatively lagging pace in the transition to new energy. Facing the strong impact of independent brands in the new energy market, they have failed to promptly launch competitive new energy products, resulting in their market share gradually being squeezed.

The luxury car market also faced considerable challenges in August. The retail sales of luxury cars reached 210,000 units that month, although the month-on-month growth rate was as high as 21%. However, this was largely influenced by the low base in July (luxury car retail sales in July were 170,000 units, representing a 20% year-on-year decline and a 29% month-on-month decline). Compared to the same period last year, retail sales of luxury cars in August still showed a 5% decline, indicating that the growth momentum in the luxury car market has weakened.

In terms of market share, the retail share of luxury brands in August was 10.5%, a year-on-year decrease of 1.1 percentage points. The Passenger Car Association frankly stated that the traditional luxury car market is under greater pressure than the mainstream joint ventures.

The main reason is that the luxury car market not only faces competition from other brands within the same segment but also experiences pressure from high-end new energy brands. As consumer acceptance of new energy vehicles continues to increase, more consumers are beginning to prefer new energy products when purchasing high-end models. However, traditional luxury brands have been relatively slow in their new energy strategies and have failed to meet market demands in a timely manner, leading to a decline in market share.

The difference in penetration rates in the new energy vehicle market further reveals the differentiation in competitiveness among different groups. In domestic retail sales in August, the penetration rate of new energy vehicles from independent brands reached 76%, far exceeding other groups; the penetration rate of new energy vehicles in luxury cars was 31.9%, at a medium level; while the penetration rate of new energy vehicles among mainstream joint venture brands was only 6.6%, showing a significant gap compared to independent brands.

In terms of the monthly domestic retail market share of new energy vehicles, the retail share of independent brands was 69.5% in August, a year-on-year decrease of 3.4 percentage points. The market share of mainstream joint venture brands was 3.6%, a year-on-year decrease of 0.2 percentage points. The market share of emerging forces was 20.8%, driven by brands such as XPeng Motors, Leapmotor, and Xiaomi Motors, with a year-on-year increase of 4.7 percentage points. Tesla's market share was 5.2%, with a year-on-year increase of 1.0 percentage point.

Image source: Leapmotor

The formation of this pattern reflects the absolute advantage of independent brands in the new energy market, as well as the rapid rise of new power brands and the stable performance of Tesla, while the competitiveness of mainstream joint venture brands in the new energy market still needs to be improved.

The penetration rate of new energy vehicles has increased to55.2%

In August, the new energy passenger car market continued to maintain a good development momentum. Both retail sales and export performance were outstanding, demonstrating strong growth vitality.

Image source: China Passenger Car Association

According to data from the China Passenger Car Association, the retail sales of new energy passenger vehicles reached 1.101 million units in August, marking a year-on-year increase of 7.5% and a month-on-month increase of 11.6%. This growth rate indicates that new energy vehicles are becoming increasingly popular among consumers. From January to August, the cumulative retail sales of new energy passenger vehicles reached 7.556 million units, up 25.8% year-on-year. This significant growth trend makes new energy vehicles a key driving force in the overall growth of the passenger car market.

In terms of market penetration, the retail penetration rate of new energy vehicles in the overall domestic passenger car market reached 55.2% in August, an increase of 1.5 percentage points compared to the same period last year. This means that more than half of the passenger car retail sales are new energy vehicles, highlighting the increasingly prominent position of new energy vehicles in the market.

In terms of companies, in August, 14 domestic new energy passenger car brands surpassed 20,000 units in retail sales. Among them, BYD Auto led the pack with a remarkable 310,200 units, continuing to hold its industry-leading position. Geely Auto and Changan Auto followed with sales of 134,405 and 72,338 units, respectively. Other companies such as SAIC-GM-Wuling, Tesla China, Leapmotor, Hongmeng Zhixing, Chery Auto, Xiaomi Auto, XPeng Motors, Great Wall Motors, NIO, Li Auto, and GAC Aion also achieved impressive sales figures.

Mainstream independent car manufacturers are increasingly strong in the field of new energy. Companies such as BYD Auto, Geely Auto, and Changan Automobile leverage their advantages in new energy technology R&D, product layout, and market channels, resulting in consistently positive performance in the domestic new energy retail market.

In terms of exports, 204,000 new energy passenger vehicles were exported in August, a year-on-year increase of 102.7%, but a month-on-month decrease of 6.5%. Despite the month-on-month decline, the year-on-year doubling growth rate still demonstrates the strong competitiveness of Chinese new energy vehicles in the overseas market. Exports of new energy passenger vehicles accounted for 40.9% of passenger vehicle exports, an increase of 16.6 percentage points compared to the same period last year, becoming an important component of passenger vehicle exports.

In terms of the export vehicle structure, pure electric vehicles account for 66% of new energy exports, down from 80.4% in the same period last year, while plug-in hybrids account for 31.7%, significantly up from 19.5% last year. The Passenger Car Association stated that although there has been some interference from external countries recently, the export of domestic plug-in hybrids to developing countries is growing rapidly, with a bright future.

In the ranking of new energy vehicle exports by manufacturers, BYD Auto ranks first with an export volume of 79,603 units. Tesla China and Chery Automobile rank second and third with 26,040 units and 21,306 units, respectively. Geely Automobile, SAIC Motor Passenger Vehicle, Changan Automobile, Spotlight Automotive, SAIC-GM-Wuling, Polestar, and Leapmotor have also achieved impressive export results.

Image source: Chery Group

From the perspective of overseas system construction, the CKD export proportion of some independent brands is relatively high, with Great Wall Motors having a CKD export proportion of 47.8% and BYD having a CKD export proportion of 9.3%. In terms of shifting from complete vehicle export to CKD export and the construction of an overseas localization production system, companies like Great Wall Motors and BYD have performed excellently.

In September, the growth rate of the car market may slow down.

Since 2025, China's passenger car market has demonstrated strong resilience in recovery amid a complex and ever-changing environment. After experiencing brief fluctuations at the beginning of the year, it has steadily rebounded under the dual driving forces of policy guidance and market mechanisms.

In detail, in January, due to seasonal factors and the consumption cycle, the passenger car market experienced a phase of cooling down. However, after the Spring Festival holiday, with the comprehensive recovery of socio-economic activities, production and sales data in February rebounded strongly, and gradually returned to a normalized consumption pace in March. Entering the second quarter, the national policy combination to promote consumption continued to exert its effects, with intensive implementation of supporting measures in various regions. Coupled with increased subsidies from manufacturers, credit support from financial institutions, and the full resumption of offline auto shows, the market maintained a positive trend in April. In May and June, there was an exceptionally strong growth momentum. Although July did not continue this ultra-strong growth, retail sales increased by 3% compared to the historical high of 1.768 million in July 2023, still showing a good growth trend. In August, the growth trend gradually leveled out.

Image source: China Passenger Car Association (CPCA)

In September, the passenger car market may experience a development trend intertwined with opportunities and challenges.

In terms of time, September has 22 working days, the same as the same period in 2024. This ample production and sales cycle provides a good foundation for automakers to stock up, dealers to promote sales, and consumers to view and purchase cars. Additionally, since the Mid-Autumn Festival in 2024 falls in September, while in 2025 it coincides with the National Day holiday, this change may lead to a relatively higher market enthusiasm this September, giving consumers more time to participate in car purchasing activities.

On the supply side of products, the Chengdu Auto Show, as an important automotive exhibition in the second half of the year, has triggered a wave of low-priced new car launches. From economical family cars to mid-to-high-end new energy vehicles, from revamped fuel vehicles to brand new pure electric platform products, the product matrix in various market segments continues to be enriched. The new cars are not only more competitive in terms of price but also feature upgrades in intelligent connectivity, range capability, and safety configurations. This will effectively stimulate consumer demand for replacement and additional purchases, becoming the core driving force for the retail recovery in the auto market.

There are also positive signals in terms of consumption capacity and willingness. The Passenger Car Association points out that current consumer spending accounts for 68% of their disposable income, and savings are growing rapidly. As the real estate market declines and the stock market rises slowly and steadily, funds are being transferred into the stock market, showing a reverse flow of funds between the real estate and stock markets. Therefore, consumers' enthusiasm for investing in real estate will further decrease, and the surplus funds from the stock market enhance the purchasing enthusiasm and capacity of consumers holding cash for car purchases.

The impressive performance of the export market continues to contribute to the growth of the automotive market. Since the second quarter, China's automobile exports have been favorable, with some overseas markets experiencing significant growth. In July, the overseas market share of domestic new energy vehicles increased to 16%, and the pressure to clear inventory in Russia decreased, driving a continued rise in automobile exports. In the future, as the recognition of Chinese new energy vehicles in overseas markets continues to improve and the local production systems are gradually perfected, automobile exports are expected to continue contributing to the growth of the automotive market.

Policy support is expected to inject a "booster" into the car market in September. Recently, the 2025 "Thousand Counties and Ten Thousand Towns" New Energy Vehicle Consumption Season activities have been launched in Hubei, Shandong, and other regions. As a major consumer good, automobiles play an important role in boosting consumption. In county and township areas, there is still broad market space for automobiles, especially new energy vehicles. At the same time, new policies to promote automobile consumption have been intensively introduced nationwide, covering areas such as car purchase subsidies, financial interest subsidies, and charging facility construction subsidies.

Cui Dongshu stated, "The trade-in programs in various regions are gradually being restarted, and the subsidy methods are becoming more diversified, refined, and precise, which is expected to bring positive prospects to the car market."

Certainly, the passenger car market in September also faces some pressure. The Passenger Car Association pointed out that the characteristic of high sales in the "Golden September" car market has become increasingly apparent in recent years. From 2015 to 2019, retail sales in September accounted for an average of 8.8% of the annual total. In the years following the pandemic, from 2023 to 2024, this proportion reached 9.3%. The monthly sales in the second half of 2024, driven by policy, have risen sharply, resulting in a relatively high sales base for this September, which to some extent may affect the growth rate for September. Additionally, the pace of subsidy funding being allocated in some regions is somewhat controlled, which may also impact the market's growth rate.