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China’s automobile production, sales, and exports hit new all-time highs for the fourth straight month in August, driven largely by strong demand for new energy vehicles and increased export volumes, according to industry experts.
Vehicle manufacturing reached 2.406 million units last month, marking an 11.3% rise compared to the same period last year and a 6.7% increase from July. This figure exceeded the previous August record of 2.24 million by 160,000 units.
Car sales also grew by 4.6%, totaling nearly 2 million units, although this growth slowed from over 10% seen earlier in the year. The sales volume narrowly surpassed the previous high of 1.92 million units, also set in August 2023.
Market moderation is partly due to government efforts to curb excessive price competition, known as involution, which tends to erode profitability and hinder technological innovation. The industry is shifting towards fewer price reductions and more moderate promotional activities, the association reports.
Price reductions occurred for 23 vehicle models last month, a decline from 29 in August of the previous year and 25 in August 2023.
Analysts suggest that maintaining high year-over-year growth in sales may be challenging in the coming months. A forecast anticipates modest growth in the first half of the year, stronger expansion in the middle, and more moderate increases in the latter half. Policy changes, such as the expiration of national vehicle tax exemptions after next month, are expected to slow growth further. However, ongoing anti-involution measures could help ease industry pressures and promote sustainable, high-quality development.
Discounts on new energy vehicles held steady at around 10.7%, showing a rise of 2.5 percentage points from last year, while discounts for conventional internal combustion engine cars remained stable at 22.9%, a slight decrease of 0.5 points from July.
Exports surged to 499,000 units in August, up 20.2% year-over-year and 3.1% from July. From January through August, total auto exports reached 3.471 million units, an 11.3% increase compared to the same period last year.
Of the August exports, 204,000 units were new energy vehicles, more than doubling from the previous year and representing half of all vehicle exports, a notable increase of 16.6 percentage points.
The penetration rate of new energy vehicles in domestic retail markets rose to 55.2%, up 1.5 percentage points from a year earlier, primarily due to vehicle replacement trends and exemption from purchase tax for NEVs.
Major traditional automakers have successfully advanced their transformation and upgrade strategies, with companies like Geely, Chery, Changan, and Great Wall Motor expanding their market shares in August.
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