BEIJING – China’s auto market grew for a fourth straight month, driven by strong government stimulus and a robust recovery in demand for commercial vehicles.
Sales in China rose 16.4% in July compared to a year earlier to 2.11 million cars, the government-backed China Automobile Manufacturers Association said Tuesday.
Since May, the world’s largest car market has recorded year-over-year sales at low double-digit percentages, as Beijing imposes restrictions and offers advantageous policies and subsidies in a bid to rebuild the economy and to stimulate spending.
CAAM maintained its forecast for a 10% to 20% decline in sales this year, but warned China’s exports and chain could suffer if another wave of coronavirus hits in autumn and winter.
Nissan Motor Co. said last week that its sales in China increased by 11.6% in July compared to a year earlier. SAIC Motor Corp., China’s largest auto manufacturer by sales, said last week that its domestic sales in July increased by 4% from a year earlier.
CAAM is following the wholesale market for cars, and warned Tuesday that car dealers should pay attention to inventories, which swelled 11.6% last month. Demand for retail trade was weaker in July, sector groups suggested, as consumers stepped into the growing stock market and delayed car purchases in hopes of more incentives and subsidies coming from central and local governments.
“Car dealers are facing intense pressure to cut prices in the second half to meet their annual targets,” the state-backed China Automobile Dealers Association said last week, based on a survey of car dealerships nationwide.
Sales of new energy vehicles, including electric cars, rose 19.3% last month from a year earlier to 98,000 cars, CAAM said, marking the first month of growth in one year.
Tesla Inc. sold 11,014 China-made Model 3s in the country in July, according to data from the China Passenger Car Association.
The Chinese government is relying on electric cars to drive new demand, especially in lower-income rural areas. The coronavirus has plunged consumer sentiment and disrupted the operations of hail companies, which are major buyers of electric cars.
Beijing launched a new campaign to encourage electric cars last month, supporting more than a dozen models of electric cars produced by Chinese car manufacturers and encouraging local governments and car manufacturers to promote them in small towns and cities, with subsidies. The government also promised to develop a network of charging facilities covering China’s rural areas, as part of a larger economic campaign to build ‘new infrastructure in a new style’.
The Ministry of Industry and Information Technology will reduce restrictions and offer other supportive policies in an effort to repair harmful electric cars affected by the pandemic.
Alibaba Group Holding Ltd. Supports Electric Automaker XPeng Inc. said Friday that it has submitted it to list its shares in New York, following the debut of rival Li Auto Inc., backed by Tencent Holdings Ltd., on the Nasdaq Stock Market last month.
Raffaele Huang contributed to this article.
Write to Jonathan Cheng at [email protected]
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