BEIJING (Reuters) -Passenger vehicle sales in China fell in August for the fifth straight month, industry data showed on Monday, though sales of all-electric and plug-in hybrid models rose, helped by subsidies for drivers trading in more polluting vehicles.
Sales fell 1.1% from the same month a year earlier to 1.92 million vehicles, data from the China Passenger Car Association (CPCA) showed. That compared with a 3.1% decline in July.
New energy vehicle (NEV) sales, however, jumped 43.2% to account for a record 53.5% of total car sales, as local EV champion BYD (SZ:002594) set a sales record and U.S. rival Tesla (NASDAQ:TSLA) had its best month of 2024.
Car exports increased 24% after a 20% rise in July.
The numbers reflected waning consumer confidence, with first-time car purchases lagging behind trade-ins, the association said last week.
Drivers are eligible for a cash subsidy of as much as 20,000 yuan ($2,823) when trading in petrol-powered cars to buy NEVs, while those trading in petrol-powered cars for smaller-engine alternatives are entitled to up to 15,000 yuan.
In line with a downshift in consumer spending, local EV majors Nio (NYSE:NIO) and Xpeng (NYSE:XPEV) launched lower-priced brands earlier this year.
“Over 80% of the applicants for trade-in subsidies opted to buy NEVs,” CPCA secretary general Cui Dongshu said.
Despite the recent declines, car sales were up 1.6% in the first eight months of 2024, CPCA data showed.
Anticipating a sustained tailwind from government incentives on especially NEV sales, Cui said he expected sales for the full year to remain in positive territory.
NEV sales are projected to be close to 50% of domestic car sales this year, before crossing that milestone in 2025, Cui added.
Rising EV and plug-in hybrid sales have barely helped with challenges at dealerships that are battling price falls.
More than half of dealerships suffered a loss in January-June, with the ratio up 7.3 percentage points from a year prior, data from the China Automobile Dealers Association showed.
Money-losing China Grand Automotive Services, the second-largest dealership, was delisted from the Shanghai bourse in August after its stock traded below par value for 20 consecutive days.
($1 = 7.0852 Chinese yuan renminbi)
