By Jiahui Huang


China's auto market weakened further in May, with rising oil prices denting demand for gasoline-powered cars and helping electric and plug-in hybrid vehicles capture a record share of new car sales.

Retail sales of passenger cars in May fell 22.1% from a year earlier to 1.51 million units, the China Passenger Car Association said Monday. EVs and hybrids accounted for a record high 62.9% of new car sales even as retail sales of new-energy cars fell 7.5% to 950,000 units.

The data reflects continuing weak domestic demand in the world's largest auto market after years of rapid growth and intense competition.

The weakness in the home market was weighed primarily by a surge in oil prices that eroded demand for fuel-powered vehicles, the agency said.

May sales improved, with total retail sales of passenger cars rising 9.2% from April. The government's campaign against excessive price competition helped stabilize promotions and reduced incentives for consumers to delay purchases in anticipation of deeper discounts. Demand also received a slight boost from the Beijing Auto Show in late April, the CPCA said.

Facing fierce competition and sluggish demand at home, Chinese automakers continued to expand aggressively overseas. China exported 784,000 vehicles in May, with new-energy vehicles accounting for a record 54% of total exports, according to the CPCA.

In May, Tesla exported 38,701 units made at its Shanghai plant and sold 85,982 units to Chinese buyers.

China's auto market is expected to record a modest sequential recovery in June, thanks to automakers' efforts to boost sales before the midyear mark and an extra working day compared with a year earlier, the industry body said.

That said, sales growth is likely to remain subdued as cautious consumer spending, tighter auto financing conditions and high fuel prices will continue to pressure demand.


Write to Jiahui Huang at jiahui.huang@wsj.com


(END) Dow Jones Newswires

06-08-26 0545ET