(Yicai) July 9 -- Auto sales in China tumbled 20 percent in the first half of this year from a year earlier, weighed down by a prolonged weakness in the gasoline vehicle market.

Almost 8.8 million passenger vehicles were sold through retail channels in the six months ended June 30, according to data released by the China Passenger Car Association yesterday. For last month, sales plunged 23 percent to around 1.62 million units year over year, which was still a 5.9 percent increase from May.

In addition, the new energy vehicle market is no longer seeing an across-the-board growth, the CPCA said. Sales of high-end EVs are surging, but those of budget models face pressure, with new product launches doing far less to lift the market and dealers broadly posting losses as operating risks climb. 

The core pressure on China's auto market comes from fuel cars, said Cui Dongshu, secretary general of the CPCA. The high fuel prices and consumer preference shifting to electric cars led to sales of fuel autos tumbling 39 percent in June from a year ago, accounting for 78 percent of the overall decline in retail sales.

NEV retail sales fell 9.4 percent to 1.11 million units last month, bringing the total for the first half to just over 4.7 million units, down 14 percent from a year earlier. However, wholesale figures saw year-on-year growth, rising 19 percent to 1.48 million units in June and 5.1 percent to 6.79 million units in the first half.

Chinese marques' sales through retail channels dropped 18 percent to 1.1 million units last month, with their share of domestic retail sales climbing to 68.6 percent from 64.1 percent. That of leading joint venture brands plunged 34 percent to 330,000 units, while that of luxury brands fell 30 percent to 170,000 units. 

BYD led retail sales in June, followed by Geely Auto and Changan Automobile, with the three companies seeing sales drop 36 percent, 12 percent, and 25 percent to 224,000, 173,000, and 99,000, respectively. 

Car exports, including complete vehicles and complete knock-down kits, surged 82 percent to 877,000 units last month, accounting for 37 percent of automakers' total sales, compared with 19 percent a year earlier. NEV exports made up 57 percent of the total exports, up from 41 percent.

Profitability pressure across China's auto industry kept building, with total profits falling 20 percent to CNY144 billion (USD21.2 billion) in the first five months of this year from a year ago, while revenue climbed 1.4 percent to CNY4.21 trillion (USD618.8 billion). The profit margin dropped to 3.4 percent, below the 6.1 percent average for downstream industrial enterprises and the 3.7 percent monthly reading seen in March and April.

Looking to July, the auto market is expected to enter a period of structural improvement due to global oil prices having retreated to around USD70 a barrel, a decline in the producer price index, and the rollout of new products following the implementation of new national safety standards for NEVs, Cui pointed out.

The CPCA adjusted its full-year retail growth forecast to a drop of 14 percent in mid-June, marking its most pessimistic projection ever. The association still expects market sentiment to gradually improve from this month onward, narrowing the decline from the previous year.

Editor: Martin Kadiev