After falling 3.1% in July, sales fell 1.1% year over year to 1.92 million units. This is a minor improvement. Sales of new energy vehicles (NEVs), which include plug-in hybrid and electric versions, increased 43.2% despite the overall fall, accounting for 53.5% of all automobile sales. In the NEV market, Tesla and BYD led and made records for sales.
Automobile exports increased as well, at 24% after rising 20% in July. Consumer confidence is still declining, though, as there are more trade-ins than new purchases. Drivers wishing to transition from gasoline-powered vehicles can receive subsidies of up to 20,000 yuan ($2,823) for NEV purchases and up to 15,000 yuan for smaller-engine models.
Local EV manufacturers Xpeng and Nio launched more affordable brands in response to changing consumer demand. Falling car costs are a problem for dealerships, even with growing sales of NEVs. In the first half of the year, over half of dealerships reported losses—a 7.3 percentage point increase from 2023. The second-biggest dealership, China Grand Automotive Services, had its stock trade below par value for 20 days in a row before it was delisted from the Shanghai Stock Exchange in August.
