Hua Xia Shi Bao·2025-06-13 04:57Core Insights - In May, China's automotive production and sales reached 2.649 million and 2.686 million units respectively, marking year-on-year growth of 11.6% and 11.2% [2] - New energy vehicles (NEVs) accounted for 48.7% of total new car sales, with production and sales of 1.27 million and 1.307 million units, reflecting year-on-year increases of 35% and 36.9% [2][3] - Domestic sales of traditional fuel vehicles decreased, while NEVs showed significant growth, indicating a shift in consumer preference towards electric vehicles [2][3] Domestic Market Performance - Domestic car sales reached 2.135 million units in May, with a year-on-year increase of 10.3% [2] - NEVs contributed significantly to this growth, with domestic sales of 1.095 million units, a year-on-year increase of 27.9% [3] - The market for Chinese brand passenger cars improved, with sales reaching 1.622 million units, a year-on-year increase of 22.6%, resulting in a market share of 69% [3] Industry Profitability - Despite growth in production and sales, the automotive industry's profitability is declining, with profit margins dropping from 6.2% in 2020 to an estimated 4.3% in 2024 [4] - The industry's revenue for January to April 2025 was 325.52 billion yuan, with profits of 13.26 billion yuan, reflecting a year-on-year profit decline of 5.1% [4] - The competitive landscape is characterized by "involution" and price wars, which are contributing to the decline in profitability [4] Export Performance - Automotive exports reached 551,000 units in May, with a year-on-year growth of 14.5% [4][5] - Passenger cars dominated exports, accounting for 85% of total exports, with 468,000 units exported [5] - NEVs also showed strong export performance, with 212,000 units exported, a year-on-year increase of 1.2 times [5] Quality and Compliance Challenges - The automotive export market is shifting from "scale expansion" to "quality improvement," with increasing compliance requirements for international markets [6] - The introduction of mandatory product certification (CCC certification) aims to enhance the quality infrastructure for automotive exports [6] - Companies are advised to avoid bringing domestic competitive pressures into international markets to prevent detrimental effects on growth [6]