Commercial Vehicle Sales Drive Recovery in China Auto Market
What’s new: China’s auto sales are expected to rise for the fourth consecutive month, with July sales coming in at 2.08 million, up 14.9% from July 2019, according to preliminary data released Tuesday by the China Association of Automobile Manufacturers (CAAM).
The spike is mostly driven by commercial vehicles, which saw sales jump 59.6% year-on-year last month. The number of passenger cars sold showed an uptick of 5.3% compared with the same period in 2019.
What’s the background: In the first seven months of the year, an estimated 12.34 million vehicles will be sold in China, down by 12.7%, according to the CAAM.
Among them, sales of passenger cars shrank 18.6% from the same period in 2019, while commercial vehicles managed to reverse the downtrend with year-on-year growth of 14.3%.
The Chinese government and local car dealerships have offered subsidies and tax breaks to stimulate the sluggish market stricken particularly hard by the coronavirus pandemic.
The downturn seems to have done little to dent the aspirations of Chinese electric vehicle companies like Xpeng, Li Auto and Hozon — all of which are eyeing IPOs at home or abroad. The companies could benefit from a more generous post-pandemic policy environment as the government has extended state subsidies for another two years.
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