Car Sales Revival in "Red May"

Recently, the China Association of Automobile Manufacturers released data showing that in May, the production and sales volumes of passenger cars reached 2.051 million and 2.075 million units, respectively, with a month-on-month increase of 0.1% and 3.7%, and a year-on-year increase of 2% and 1.2%. After a slight fluctuation in April, the production and sales of passenger cars in China have finally returned to a growth trajectory in both month-on-month and year-on-year terms. Amidst the fierce competition in pricing and value, as well as the simultaneous rise in traffic and voice volume, even an increase in sales volume has left many car companies cautious and vigilant. As more and more car companies voice that "relying solely on price wars is not an option," will the car market return to stable development in the second half of the year?

New Energy Vehicles Soar

From BYD's leading position to the record delivery volumes of NIO and Zeekr, and the return of Ideal Automobile to a monthly sales volume of 30,000 units after three months, the booming new energy vehicle market is undoubtedly evident. Data shows that in May, the production and sales volumes of new energy vehicles were 881,000 and 804,000 units, respectively, with year-on-year increases of 31% and 38.5%, and month-on-month increases of 9.9% and 18.7%. In May, the retail penetration rate of new energy vehicles reached 47%, which is close to the previously set goal of "exceeding 50% by 2035."

With its fifth-generation DM technology, BYD has set three "world's best" records in engine efficiency, fuel consumption per 100 kilometers, and comprehensive range, and has reduced the price of a single car to below 100,000 yuan. Undoubtedly, BYD still dominates the list of new energy vehicle sales. In May, BYD sold 331,800 units, including 330,500 passenger cars, a year-on-year increase of 38.2%. In the top ten retail sales list of passenger cars in China in May, BYD captured six spots with models such as Qin PLUS, Seagull, Song PLUS, Destroyer 05, Yuan PLUS, and Song Pro, with Qin PLUS leading with a sales volume of 48,700 units.

Tesla's May sales in China also achieved significant year-on-year and month-on-month growth. Data shows that Tesla's domestic sales in May exceeded 55,000 units, a year-on-year increase of 30%, and a month-on-month increase of 77%. Among them, the Model Y's domestic sales in May reached 40,000 units, a year-on-year increase of 28.7%, and a month-on-month increase of over 50%; the new Model 3's domestic sales reached 15,000 units, a year-on-year increase of 32.9%, and a sharp month-on-month increase of 200%.

Despite facing a series of challenges such as poor sales of new products, a significant decline in profits in the first quarter, collective lawsuits from investors, and large-scale layoffs, Ideal Automobile's market performance in May remained strong, delivering 35,000 new cars, a year-on-year increase of 23.8%, and a month-on-month increase of 35.80%.

Following closely, Seres achieved a sales volume of 34,100 units in May, a year-on-year increase of 298.62%. From January to May, Seres' cumulative sales volume has exceeded 150,000 units, a year-on-year increase of 342.35%. As of June 18, Seres' market value reached 151.5 billion yuan, surpassing NIO, XPeng, and Ideal in market value.

After breaking through the 20,000-unit milestone in July of last year, NIO Automobile delivered 20,500 new cars in May for the second time, a year-on-year increase of 233.8%, and a month-on-month increase of 3%, shaking off the sluggish performance in the first quarter. NIO's PR Director, Ma Lin, believes that the main reasons for the positive sales trend are twofold: firstly, the 2024 model has high computing power and full-domain, full-volume intelligent driving push, which has shown everyone NIO's high computing power capabilities and potential. Secondly, consumers are increasingly recognizing the benefits of battery replacement for pure electric cars, such as convenience and no anxiety about battery decay, coupled with BaaS price adjustments and promotions, providing real discounts to users.

Zeekr also set a new delivery record in May. In May, Zeekr delivered 18,600 vehicles, a year-on-year increase of 115%, and a month-on-month increase of 16%. From January to May, Zeekr has accumulated a delivery of 68,000 vehicles, a year-on-year increase of 111.7%. Among them, Zeekr 001 performed particularly well, breaking the 10,000-unit single car delivery for two consecutive months, and has been the sales champion for pure electric models over 250,000 yuan.

In addition, XPeng and Hozon also returned to the "10,000-unit club." XPeng sold 10,146 units in May, a year-on-year increase of 35%, marking the first time this year that monthly sales exceeded 10,000 units. Hozon delivered 10,113 whole vehicles, achieving a month-on-month increase of 12.15%, but still showing a year-on-year decline of 22.4%.

Fuel Cars Raise Concerns

Behind the rapid development of new energy vehicles is the continuous contraction of the fuel car market. According to data from the Passenger Car Market Information Joint Conference of the China Automobile Circulation Association, in May, the retail sales volume of the domestic passenger car market was 1.71 million units, a year-on-year decrease of 1.9%, and a month-on-month increase of 11.4%. In the view of Cui Dongshu, Secretary-General of the Passenger Car Market Information Joint Conference of the China Automobile Circulation Association, the main reason for the year-on-year decline in domestic passenger car retail sales volume in May is the decline in traditional fuel car sales. In May, the domestic fuel car retail sales volume was 910,000 units, a year-on-year decrease of 23%. From January to May, the cumulative retail sales volume of domestic fuel cars was 4.82 million units, a year-on-year decrease of 9%.

Joint venture brands that once relied on fuel cars to "lie and win" continue to be impacted by the decline in sales. Data from the Passenger Car Market Information Joint Conference of the China Automobile Circulation Association shows that in May, the retail volume of mainstream joint venture brands was 490,000 units, a year-on-year decrease of 21%. Specifically, the retail market share of German brands was 18.6%, Japanese brands was 14.8%, and American brands was 6.7%, with year-on-year declines of 2%, 3.2%, and 1.4%, respectively.

The production reduction of joint venture brands has obviously had a significant impact on car companies such as SAIC Group, GAC Group, and Dongfeng Motor. Data shows that in May of this year, SAIC Group's sales volume was 332,200 units, still ranking first in the sales list of A and H share listed car companies, but with a year-on-year decline of 17.10%, and only a difference of 400 units in sales volume from BYD, which ranked second. Among them, SAIC Volkswagen's sales volume was 90,000 units, a year-on-year decline of 3.01%; SAIC General Motors' sales volume was 38,400 units, a sharp year-on-year decline of 58.27%.

Under the fierce