(Yicai) June 10 -- China's passenger vehicle production and sales, both retail and wholesale, rose to new record highs last month, driven by improvements in the external trade environment and policies to boost consumption.

Passenger car production expanded 12.6 percent to 2.27 million units in May from a year earlier, according to data from the China Passenger Car Association.

Retail sales of passenger vehicles soared 13.3 percent to 1.93 million units in the period, surpassing the previous record of 1.8 million units set in May 2018 and achieving a monthly growth of more than 10 percent for the fourth time this year, CPCA data also showed. Meanwhile, wholesale sales rose 12.8 percent to record 2.31 million units.

BYD, Geely Automobile, and Changan Automobile led China's passenger car retail sales ranking with 293,000, 205,000, and 136,000 units, respectively. Only four automotive joint ventures with foreign automakers made it into the top 10, including those with Volkswagen and Toyota Motor as shareholders.

Auto production and sales in China grew last month mainly because of the auto scrapping and trade-in programs, as well as tax exemption policies for new energy vehicle purchases, which boosted NEV sales by over 28 percent to 1.02 million units from a year earlier.

China's NEV penetration rate was 52.9 percent in May, with that among Chinese carmakers and luxury brands reaching 68.7 percent and 37.5 percent, respectively. However, the rate for joint ventures between Chinese and foreign automakers was only 4.3 percent.

China's passenger car exports jumped 14 percent to 448,000 units last month from the same period last year, with NEVs accounting for nearly 45 percent of the total, compared with 28 percent a year earlier, according to CPCA data. Exports by Chinese automakers surged 18 percent to 375,000 units.

Despite declining exports to Russia at the beginning of the year, Chinese brands still maintain a market share of over 55 percent in the country, the CPCA noted. Considering the current state of Russia's automotive industry, Chinese auto exports to Russia are expected to recover to a certain level.

China's auto production and sales will keep expanding steadily this month, while growth will gradually decelerate, the CPCA predicted.

Prices of battery raw materials are declining, making NEVs more affordable. For example, lithium carbonate prices plunged to CNY60,000 (USD8,350) per ton now from CNY600,000 (USD83,515) per ton at the beginning of 2023, CPCA's Secretary-General Cui Dongshu said.

Moreover, the producer price index, which measures the price of goods at the factory gate, dropped 3 percent this month from a year earlier, with overall costs declining, leaving space for reasonable promotions among carmakers, Cui noted.

From July last year to May this year, the price competition for both fossil fuel and electric vehicles has been relatively moderate, Cui pointed out, adding that he hopes this mild competitive environment can be maintained.

Editor: Futura Costaglione