China Auto Market Opens July on Weak Note, NEV Retail Down 9%

China’s passenger vehicle market extended its seasonal slowdown in the first week of July, according to the latest data released by the China Passenger Car Association (CPCA).

Passenger vehicle retail sales totaled 169,000 units nationwide during July 1–5, down 15% year on year but up 4% from the same period of the previous month.

Automakers’ wholesale deliveries reached 127,000 units over the same period, down 35% year on year and 13% lower than the corresponding period last month.

Following the sales push at the end of June to meet first-half targets, China’s auto market entered its traditional off-season, with consumer demand showing a noticeable pullback.

On a year-to-date basis, cumulative passenger vehicle retail sales stood at 8.87 million units, down 20% year on year, while cumulative wholesale deliveries totaled 12.673 million units, down 6%, indicating the market remains in an adjustment phase.

New energy vehicles (NEVs) continued to outperform the broader market despite the slowdown.

Retail sales of NEV passenger vehicles reached 103,000 units during July 1–5, down 9% year on year, a significantly smaller decline than that of the overall passenger vehicle market. NEVs accounted for 60.5% of total retail sales.

Wholesale NEV sales also softened. During the first five days of July, NEV passenger vehicle wholesale volume totaled 83,000 units, down 20% year on year and 15% from the previous period, with NEVs accounting for 65.5% of total wholesale deliveries.

Despite the weaker start to July, the NEV market continued to post growth on a cumulative basis.

Year-to-date wholesale deliveries reached 6.871 million units, up 5% year on year, while cumulative retail sales totaled 4.807 million units, down 14%.

The decline in wholesale deliveries during the opening week of July was largely driven by seasonal factors.

Many automakers accelerated deliveries in June to meet first-half sales targets, pulling forward part of consumer demand.

A relatively high comparison base from the same period last year also amplified the year-on-year decline.

As the market entered its traditional low season, showroom traffic weakened, dealers became more cautious about inventory replenishment, and most automakers proactively moderated production and shipment schedules, putting additional pressure on wholesale figures.

On the production side, the divergence between NEVs and internal combustion engine vehicles continued to widen.

Output of conventional gasoline-powered light vehicles fell to just 90,000 units in the first week of July, down 42% year on year.

Meanwhile, production of hybrid and plug-in hybrid models reached 78,000 units, up 15% year on year and 59% from the previous period, indicating automakers continue to shift production capacity toward electrified vehicles.

Overall, although the market started July on a weak note, NEVs remained the primary source of resilience in China’s passenger vehicle market.

Ongoing product launches, improved price competitiveness and supportive policy measures continued to cushion the decline, allowing the NEV segment to outperform conventional gasoline vehicles.

At the same time, some automakers maintained production and sales momentum through new model launches and overseas exports.

Export orders also continued to absorb domestic production capacity, providing additional support for wholesale volumes.