Cui Dongshu: The high-end characteristics of the car market structure will be strengthened in 2024, and the retail sales of passenger cars in February temporarily declined.

On March 10, Cui Dongshu, Secretary General of the China Passenger Car Association, stated that according to data from the China Passenger Car Association, the sales structure of passenger cars in the national market has been continuously trending upwards in terms of price segments. The proportion of sales of high-end car models has increased significantly, while the proportion of sales of mid-range and low-priced car models has decreased. This trend is being driven by consumer upgrades and the upgrading of purchasing groups. In 2024, there will be a further strengthening of the high-end characteristics of the vehicle market structure, with a temporary downturn in retail sales of passenger cars in February 2024. From a structural analysis perspective, there is a significant shrinkage in entry-level purchases, indicating that there are issues with the lack of a solid consumer base, inadequate purchasing power for mid and low-end cars, and evident price wars. The upward trend in the prices of traditional fuel cars is not a favorable factor for stimulating consumption. It is necessary for the ordinary consumer group to strengthen their purchasing power for entry-level cars, as low-end consumption is crucial. Therefore, improving the purchasing power of the ordinary consumer group, achieving a relatively balanced price structure in the vehicle market, stimulating entry-level consumption, and promoting the consumption upgrading of first-time buyers are important. 1. Sales structure of passenger cars by price segment According to retail data from the China Passenger Car Association, the trend in the price segment structure of urban markets nationwide continues to rise, with a notable increase in sales of high-end car models and a decrease in sales of mid to low-priced car models. The proportion of car models priced below 50,000 yuan has been steadily increasing from 2021 to 2022 compared to 2020, mainly due to the contribution of sales of micro electric vehicles. However, since 2023, there has been a continuous decline, with the proportion of car models priced under 50,000 yuan accounting for only 2.8% in 2024, a decrease of 0.4 percentage points from 2023. The overall downtrend is evident after the decline in sales of traditional car models priced between 50,000 to 150,000 yuan is offset by the growth of new energy vehicles. The market share of car models priced above 150,000 yuan continues to rise rapidly. The proportion of car models in various price ranges above 150,000 yuan has been steadily increasing in recent years, especially the significant increase in the proportion of car models priced above 300,000 yuan, reflecting the evident trend of high-end development brought about by the growth of new energy passenger cars. 2. Sales structure of passenger car levels in the market The penetration rate of new energy vehicles is highest in small cars, with a 100% penetration rate for micro cars and a breakthrough of over 50% for A0-level small cars, with rapid growth in the adoption of new energy for A0-level cars. The penetration rates of new energy vehicles in B-level cars and C-level cars have significantly increased, reflecting the apparent advantages of high-end electrification. The penetration rate of new energy vehicles in high-end cars has mainly been driven by the trend of independent improvements. Currently, the penetration rate of new energy vehicles in the 100,000 to 200,000 yuan price range is relatively low, with the penetration rate for high-end new energy vehicles surpassing 30%, while the penetration rate for new energy vehicles below 100,000 yuan has reached over 50%, with nearly 80% for those priced below 50,000 yuan. 3. Structure of new energy vehicles in passenger cars The retail sales of pure electric new energy vehicles in the country have continued to grow rapidly, with plug-in hybrids showing outstanding performance in the past three years and extended-range electric vehicles experiencing modest growth. The sales of traditional passenger cars have been under continuous downward pressure. The proportion of new energy vehicles in 2023 reached a strong 36%, with new energy vehicles contributing 35% in February 2024, indicating a slight increase in the contribution of new energy vehicles in the future. 4. Price and sales structure of various types of powertrains in 2023 Currently, the 50,000 to 150,000 yuan price range is the core market segment for passenger cars in the country, with a high proportion of traditional fuel cars. There is a significant difference between traditional cars and new energy vehicles, with a relatively concentrated structure in mid-range plug-in hybrids. 5. Internal powertrain sales structure by price segment in February 2024 There is a relatively uneven distribution of powertrains within the price segment market. Pure electric vehicles perform the strongest in the market segment below 50,000 yuan, while extended-range electric vehicles have the strongest performance in the high-end market segment, and hybrid vehicles perform relatively well in the 200,000 to 300,000 yuan segment. Traditional fuel cars perform relatively well in the 100,000 to 200,000 yuan segment, showing a differentiated distribution feature, especially for plug-in hybrids, which are mainly in the mid-to-high price range, while plug-in hybrids are mainly mainstream models. The low-end market at the beginning of the year experienced a significant decline, indicating a greater impact from weak consumption on the low-end segment. 6. Structure of conventional fuel passenger cars There is a clear trend towards high-end products in the structure of traditional fuel cars, particularly in the strong growth of cars priced above 150,000 yuan, which directly reflects the upgrading of consumption. The speed of decline for fuel cars priced below 100,000 yuan is rapid, with a sharp drop in sales of low-priced fuel cars under the growth of pure electric vehicles. 7. Changes in the product structure of pure electric vehicles - significant growth in the high-end segment As costs decrease and product quality improves, pure electric vehicles priced below 50,000 yuan and above 300,000 yuan show stable performance. Tesla remains positioned above 200,000 yuan to prevent significant fluctuations in the structure. Currently, there is a relatively low proportion of electric cars priced between 100,000 to 150,000 yuan, with slow growth. With the decline in lithium carbonate prices, there is still great potential for growth in new energy vehicles. Electric vehicles priced between 150,000 to 200,000 yuan were mainly used for rental and ride-hailing services in the early stages, and the trend for A-level electric vehicles in the market has not been strong in recent years. 8. Changes in the product structure of plug-in hybrids - significant growth in the mid to high-end segment The growth of plug-in hybrid models has primarily been in the low-priced range, with self-developed plug-in hybrid technology gaining a significant share in the mid to low-priced markets. 9. Changes in the product structure of extended-range electric vehicles - gradual growth in the mid-range Extended-range electric vehicles, as a branch of pure electric vehicles, have shown continued strength in the mid to high-end markets, with strong performance in products priced at 150,000 yuan and above. 10. Changes in the high-end market share of ordinary hybrid products The market share of hybrid vehicles continues to increase, and the improvement in supply in 2024 has resulted in a gradual increase in market share. The market demand is shifting towards plug-in hybrids driven by policies, with average performance for hybrid vehicles. 11. Changes in the market share of various types of automakers' products In 2024, domestic brands have performed well, with comprehensive efforts in new energy development and good performance in extended-range and plug-in hybrids. Overall, the advantage of new energy lies in the prominent high-end hybrid technology brought about by independent innovation, with significant fluctuations in the structure of emerging companies and good performance in extended-range products.