The inventory has only been digested for a month, and the car companies that are rolling up have stepped on the production accelerator again

In May this year, the overall car market, driven by the hot consumption of the May Day holiday, and the guidance of the new China VI automobile exhaust emission policy, the non-RDE models of automobile dealers had a half-year sales transition period, and their automobile inventory pressure was greatly eased, and the sales growth trend was generally maintained.

In May this year, overall passenger car production reached 2.001 million units, up 18% year-on-year and 14.7% month-on-month. Retail sales of passenger cars reached 1.742 million units, up 28.6% year-on-year and 7.3% month-on-month, which shows that automobile production and sales in May have returned to the trend of positive month-on-month growth, mainly because April's automobile inventory has been greatly digested and improved, so that automobile production has returned to positive growth after two consecutive months of control.

New energy vehicles are also in a state of steady growth, with production reaching 668,000 units in May, up 53.7% year-on-year and 11.4% month-on-month. Retail sales reached 580,000 units, up 60.9% y/y and 10.5% m/m. The number of companies with wholesale sales of new energy manufacturers exceeding 10,000 units also increased by 1 to 12 month-on-month; The penetration rate of new energy vehicles remained high, stabilizing at more than 30% to 33.7%, a year-on-year increase of 7.2 percentage points.

1. Inventory continues to accumulate in the first quarter

In the first quarter of this year, the automobile production progress of car companies is under effective control, and the overall passenger car production is 5.088 million units, down 5.3% year-on-year, which is not a small gap compared with the level of the first quarter of previous years (passenger car production in the first quarter of 2021 and 2022 was 4.817 million and 5.361 million units, an increase of 87.5% and 11% year-on-year), mainly because of the continued high inventory and the need to digest inventory. Especially under the pressure of the upgrade of China VI vehicle emission standards on July 1, inventory improvement is imperative.

In the first quarter of this year, the comprehensive inventory coefficient of mainland auto dealers not only continued to maintain the boom and bust line of 1.5, but also much higher than the same period last year, with inventory coefficients from January to March being 1.8, 1.93 and 1.78 respectively (1.46, 1.85 and 1.75 in the same period last year).

In the first quarter of this year, the inventory level of automakers also increased from 720,000 units in January to 838,000 units in March, and the overall inventory of car dealers and automakers was as high as 3.61 million vehicles, which is the highest level in the past two years after October (3.72 million units) and November (3.94 million units) last year.

Fortunately, the inventory accumulation effect has reached its peak in March, with the fuel vehicle brand significantly reduced the price to inventory, and the electric vehicle brand itself price war, so that the car inventory in April has been greatly improved, the car dealer inventory coefficient fell 15.2% month-on-month, down 20.9% year-on-year to 1.51, back to the prosperity and drought line nearby, the industry prosperity is basically in a bottoming out state.

2. Inventory was significantly absorbed in April, and production and sales growth trend resumed in May

Inventories of automakers and dealers also fell 10.5% month-on-month to 3.23 million units in April, indicating a significant improvement in inventory status. With the Ministry of Industry and Information Technology and other five departments jointly issuing a document on China VI vehicle exhaust emission policies in May, non-RDE models of automobile dealers also have a half-year sales transition period, and their automobile inventory pressure has been greatly eased.

After the pressure on industry inventories eased, it was clear that the growth trend of production and sales resumed in May, and the overall passenger car production reached 2.001 million units, an increase of 18% year-on-year and 14.7% month-on-month. Retail sales of passenger cars reached 1.742 million units, up 28.6% y/y and 7.3% m/m.

Among them, the production of new energy vehicles reached 668,000 units in May, a year-on-year increase of 53.7% and a month-on-month increase of 11.4%; Retail sales reached 580,000 units, up 60.9% y/y and 10.5% m/m.

Obviously, with the second half of the car market gradually turning from off-season to peak season, coupled with the official start of new energy vehicle rural activities in June, the overall sales of automobiles and new energy vehicles are also expected to rise to another level, and before that, it is necessary to strengthen production planning in advance, before some car companies are controlling production, and even once output was lower than sales, mainly in clearing inventory, May began to obviously return to the right track.

3. Sales of first- and second-tier new energy vehicle companies have grown in an orderly manner

In May, the number of NEC manufacturers with wholesale sales exceeding 10,000 units increased to 12, down 1 year-on-year and up 1 month-on-month.

As the long-term sales champion, BYD's sales reached 240,000 units, reaching 109% year-on-year and 14% month-on-month, of which pure electric vehicle sales were 120,000 units, up 124% year-on-year and 14.6% month-on-month. Plug-in hybrid vehicle sales were 119,000 units, up 96.4% y/y and 13.7% m/m.

At the same time, its high-end brand Denza also sold well, with sales reaching 11,000 units, an increase of 4.6% month-on-month, and sales exceeded 10,000 units for three consecutive months. In addition, BYD's exports of new energy vehicles in the first five months of this year have reached 64,000 units, and its sales in just five months have exceeded 56,000 units in the whole of last year, accounting for 6.4% of total sales and 4.3% higher than the proportion of last year.

Tesla's May sales reached 77,700 units, up 2.4% month-on-month and 141.6% year-on-year, Tesla is expected to usher in the first facelift of its six-year explosive main model Model 3 in the second half of this year, although sales are still relatively strong in a number of new energy models, but its main position began to give way to Model Y as early as last year.

As an old model, consumers' popularity and freshness of Model 3 have indeed declined, and Model 3 competing models such as BYD Han, Xpeng P7, etc., although released and launched much later than Model 3, have been remodeled. With the appearance of Tesla Model 3 facelift in the second half of the year, it is expected to regain the focus of the market and consumers, and return to the peak of sales.

In addition, the third place is GAC AION, a new force in car manufacturing, with sales of 45,000 units, a year-on-year increase of 114%, a month-on-month increase of 10%, GAC AION, which once hung the label of online car-hailing, has gradually made efforts in the C-end after the launch of new mid-to-high-end models such as AION LXPlu and AION VPlus, although the most important model is still the low-end model AION S.