UTC+8 ( BJT)

CPCA: China passenger car sales to decline 45% on month

Domestic sales of passenger cars in China this month are expected to reach 1.2 million units, some 44.9% lower on month, according to the latest release from the China Passenger Car Association on February 22. The CPCA said the Chinese New Year holiday over February 11-17 had interrupted sales, leading to the decline in sales.
Besides the halt in sales activities among dealers during the week-long CNY break, central and local government authorities had also encouraged people to avoid travelling during that period – to limit the spread of the resurgent coronavirus – which restrained new car demand to some extent, according to the report. However, informal travel curbs on holiday motorists during the break would also see consumption rapidly resume, now that the country has returned to work, it added.

CPCA reiterated the solid support the industry is receiving from the country’s economic stimulus policies, noting that in a guidance released on February 9, China’s Ministry of Commerce pledged to help expand new car consumption by several means including optimizing purchase limitation policies (such as easing quotas on licence plate issuance), promoting car sales in rural areas, and encouraging new-energy vehicle (NEV) sales.

On February 10, the Shanghai municipal government also kicked in a new supportive policy for NEVs, which said that starting 2023, those consumers who buy hybrid vehicles which combine a gasoline engine with an electric motor would not be granted local licence plates and that only battery electric vehicles (EVs) could be licensed to drive on Shanghai roads.

Despite the modest on-month sales decline expected for February, the Association’s monthly sales forecast was significantly higher on year. In February last year when China was in the grip of the escalating COVID-19 surge and many consumers were in lockdown at home, car sales totalled only 249,000 units, Mysteel Global notes.

By the end of last month, the index of car stocks at Chinese dealers had declined 15% on month but was still higher by 2% on year at 1.53 basis points, still above the threshold of 1.5, according to CPCA’s data.

“2021 might be the turning point for the Chinese auto industry, and the country might realize its (production) target of 30 million units by 2023,” Lang Xuehong, the deputy general secretary of China Automobile Dealers Association said in early February.

In January, China sold slightly over 2.5 million units, down 11.6% on month or up 29.5% on year, while vehicle output jumped 34.6% on year to 2.39 million units though this was lover by 15.9% on month, as reported. 

Written by Anna Wu, wub@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com