New energy vehicle sales soar in July

New energy vehicles accounted for more than 60 percent of China's new vehicle sales for the first time in July, consolidating the segment's position as the main growth engine of the country's auto industry, latest industry data showed.

Data released by the China Association of Automobile Manufacturers on Wednesday showed that NEV output reached 1.576 million units last month, up 26.8 percent year-on-year, while sales rose 23.7 percent to 1.561 million units, or 60.4 percent of total new vehicle sales.

The milestone is a wider indicator of growth than the passenger car retail gauges often cited in the market, as the association's tally covers passenger and commercial vehicles and includes sales at home and abroad, showing that NEVs now form the bulk of the industry's overall sales mix.

The record was accompanied by a second milestone. In the first seven months of this year, NEV output rose 9.5 percent year-on-year to 9.014 million units, while sales increased 9.6 percent to 9.007 million units.

NEVs accounted for 51.2 percent of total new vehicle sales during the period, the first time the cumulative share has exceeded 50 percent.

By contrast, the auto market continued to show signs of weakness in July. Vehicle output and sales totaled 2.573 million and 2.584 million units, respectively, for the month, down 6.8 percent and 8 percent month-on-month and 0.7 percent and 0.3 percent year-on-year, respectively. In the first seven months of the year, both output and sales fell 3.7 percent year-on-year, although the declines narrowed from the first half of the year.

Chen Shihua, deputy secretary-general of the CAAM, said the auto market entered its traditional low season in July. Store traffic and orders eased, while automakers' midyear sales drives brought some demand forward. Persistent heat, typhoons and flooding in some regions also weighed on showroom visits, contributing to the month-on-month decline, he said.

Yet the shift in the industry's growth base remained intact. "The twin growth engines of NEVs and exports helped offset pressure from the domestic low season, while the industrial structure continued to improve," Chen said.

He added that new energy passenger vehicles in the 100,000 yuan ($14,830) to 200,000 yuan price range provided the main volume support in the first seven months.

Robust exports

Exports provided the other pillar of growth. CAAM data showed that in July alone, NEV exports jumped 145.5 percent year-on-year to 553,000 units, accounting for about 53 percent of China's 1.043 million vehicle exports. It was the second consecutive month in which NEVs accounted for more than half of the export total.

"Conventional fuel vehicles had long dominated China's auto exports, but the structure began to shift this year as NEVs increased their share in June and July, surpassing fuel vehicles for two consecutive months," Chen noted, adding that the rapid growth of vehicle exports could also help offset weak domestic demand.

Chen expects NEV exports to continue growing at a brisk pace and exceed 4 million units this year.

"With the world's most complete NEV industrial chain and a clear edge in intelligent technologies, the competitiveness of China's automobiles is expected to be further strengthened," he said.

lijiaying@chinadaily.com.cn