UBS China Passenger Vehicle Monthly: February – Trough Before Sequential Recovery?
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China's passenger vehicle wholesale sales reached 1.52 million units in February, representing a 23% month-on-month and 14% year-on-year decline. Domestic wholesale sales fell 31% year-on-year, while retail volumes totaled 10 million units, down 25%. Exports reached 560,000 units, down 3% month-on-month but surging 60% year-on-year, with electric vehicles comprising 48% of total exports. New energy vehicle (NEV) wholesale volumes stood at 722,000 units, reflecting 48% penetration, up 4 percentage points month-on-month.
Among individual automakers, BYD sold 187,800 units, marking a 41% year-on-year decrease. Tesla delivered 58,600 units, declining 15% month-on-month but surging 90% year-on-year. Nio reached 20,800 units, dropping 23% year-on-month but rising 58% sequentially. Li Auto delivered 26,400 units, representing a 4.5% sequential decline and 1% year-on-year growth. HIMA reported 17,000 units, while Xiaomi delivered 20,400 units.
Discounting patterns diverged significantly across mass-market brands. BYD and XPeng expanded discounts by 2.2 and 4.5 percentage points respectively, while Mercedes narrowed discounts by 11.1 percentage points. Chinese brands captured 72% market share.
UBS observes emerging demand recovery signals in March, supported by local government vehicle replacement subsidies and consumer adaptation to the 5% purchase tax. Oil price volatility further enhances the total cost of ownership advantage for electric vehicles. UBS maintains Buy ratings on BYD, CATL, Li Auto, and Nio, considering the industry sales trough likely behind us.