The China Association of Automobile Manufacturers (CAAM) has released its outlook for the automotive market in September, predicting a significant year-on-year decline in retail sales for narrow-scope passenger vehicles. Despite September traditionally being a strong sales month, known as “Golden September, Silver October,” the association anticipates a further widening of the year-on-year decrease.
September Market Forecast
CAAM forecasts that retail sales for narrow-scope passenger vehicles (including sedans, MPVs, and SUVs) will reach approximately 1.69 million units in September. This represents a 9.7% increase compared to August, indicating a sequential recovery. However, on a year-on-year basis, this figure is a substantial 24.6% lower than the 2.241 million units sold in September of the previous year. The association points to an exceptionally high base from last year contributing to this large year-on-year drop.
New Energy Vehicle Performance
Within the overall market, new energy vehicles (NEVs) are expected to perform relatively strongly. CAAM predicts NEV retail sales of around 1.11 million units for the month. This segment is driven by expectations of new car deliveries and a push for sales to meet quarterly targets. The retail penetration rate for NEVs is projected to reach 65.7%.
Factors Affecting Market Performance
CAAM highlights that fundamental improvements in consumer expectations and the broader economic outlook are still lacking. Additionally, the persistent volatility and upward trend in oil prices are impacting the market. These factors combined are expected to prevent the “Golden September” sales period from achieving the robustness seen in previous years.
Weekly Sales Breakdown and Outlook
The association provided a week-by-week projection for September’s market performance:
- First Week: The market is in a recovery phase, with average daily retail sales of 35,000 units.
- Second Week: Promotional activities by various brands begin, leading to an improvement in customer traffic, with average daily retail sales expected to rise to approximately 44,000 units.
- Third Week: Manufacturer promotions intensify, and deliveries of newly launched models commence. Coupled with pre-Mid-Autumn Festival purchasing demand, customer traffic and orders continue to improve, with average daily retail sales projected to reach around 56,000 units.
- Fourth Week: The Mid-Autumn Festival falls within this week, which could boost orders. However, fewer working days might shift delivery schedules, with average daily sales estimated at 70,000 units.
- Fifth Week: A concentrated release of consumer demand before the National Day holiday, combined with end-of-quarter sales pushes by manufacturers, is expected to drive average daily retail sales to 96,000 units, marking the quarterly peak.
Overall Monthly Projection: 1.69 million units sold, a 9.7% increase month-on-month and a 24.6% decrease year-on-year.
Supportive Policies
The association notes that policies encouraging trade-ins of old vehicles and local government subsidies are continuing at their current pace, providing a floor for the “Golden September” sales performance.
Despite these supportive measures and the seasonal uptick in demand, the underlying economic conditions and consumer sentiment remain key challenges for the Chinese auto market in September.
