China NEV retail sales fall 7% in early November but capture record 74.9% of passenger car market

• NEV retail sales totaled 219,000 from November 1-8, down 7% year-on-year, outperforming a 21% decline in the overall passenger car market.
• NEV wholesale sales fell 3% year-on-year to 262,000, but surged 63% from the same period last month.

China's retail sales of passenger new energy vehicles (NEVs) totaled 219,000 from November 1-8, down 7% year-on-year but up 27% from the same period in October, according to a weekly report released Wednesday by the China Passenger Car Association (CPCA).

China's National Day holiday, which ran from October 1-7, disrupted vehicle production and sales, creating a low comparison base.

NEVs accounted for 74.9% of passenger car retail sales from November 1-8, above the monthly record of 67.5% set in October.

Year-to-date passenger NEV retail sales in China totaled 9.09 million, down 13% year-on-year.

Passenger NEV wholesale sales totaled 262,000 from November 1-8, down 3% year-on-year but up 63% from the same period last month. NEVs accounted for 78.7% of total passenger car wholesale sales.

Year-to-date passenger NEV wholesale sales reached 13.49 million, up 9% year-on-year.

NEVs significantly outperformed the broader market. Total passenger car retail sales in China fell 21% year-on-year to 293,000 from November 1-8, though they rose 2% from the same period in October.

Year-to-date passenger car retail sales totaled 15.27 million, down 22% year-on-year.

Daily passenger car retail sales averaged 36,576 during the November 1-8 period.

The auto market began November with a weak recovery with year-on-year pressure and month-on-month stabilization, the CPCA said. The broader market remained on a downward trajectory, though fluctuations near the bottom showed signs of stabilization.

Persistently high global oil prices, compounded by recent increases in domestic fuel prices, have weakened demand for gasoline vehicles more than expected, accelerating the shift to electric vehicles, according to the report.

Passenger car wholesale sales totaled 333,000 from November 1-8, down 20% year-on-year but up 63% from the same period in October. Year-to-date wholesale sales came in at 22.7 million, down 6% year-on-year.

Daily passenger car wholesale sales averaged 41,675 from November 1-8.

The NEV market faces a shortage of blockbuster models, the CPCA said. To keep supply chains running and meet production and sales targets, automakers have broadly shifted to target-driven shipments to dealers, pushing up channel inventories while NEV retail sales have edged up only slightly.

Local subsidies and automakers' year-end promotions are expected to keep the overall market stable, the CPCA said. However, a high comparison base from a year earlier means November's year-on-year decline will be difficult to reverse, and a year-end sales upswing is unlikely.

China exported 9.74 million vehicles, including chassis, from January through October, up 49.6% year-on-year. Export value rose 45.8% to 1.16 trillion yuan ($173 billion).

October exports alone reached 1.108 million vehicles, worth 133.4 billion yuan, both record highs. The CPCA expects full-year vehicle exports to reach 12 million.