Light-vehicle sales surge in Feb.

Sales of new sedans, crossovers, SUVs, multipurpose vehicles and minibuses in China advanced 28 percent to 1.49 million in February after rising 6.7 percent in January, the China Association of Automobile Manufacturers said Friday.

The latest rise in volume was fueled by robust demand for electrified vehicles and replenished stockpiles after the week-long Chinese New Year holiday ended on Feb. 6, the industry trade group noted.

The market's back to back monthy gains followed eight consecutive months of decline to end 2021.

Electrified light-vehicle deliveries soared 182 percent to some 321,000 in February, CAAM said. The sales tally was composed of around 246,000 full electric vehicles and 75,000 plug-in hybrids, representing a surge of 138 percent and 251 percent, from a year earlier, respectively.

Sales of new-energy vehicles this year have been hampered by China's move in January to slash subsidies 30 percent. NEV deliveries in January fell 19 percent from December, when sales surged as consumer demand spiked ahead of the cut in incentives.

China has ambitious goals in promoting NEVs to curb air pollution but believes the industry has matured enough to be driven by natural demand rather than subsidies.

At the end of February, overall stockpiles at light-vehicle makers rose 9.8 percent from a month earlier to some 481,000, according to CAAM.
 

February deliveries of crossovers and SUVs industrywide spiked 30 percent to roughly 734,000, while sedan sales jumped 28 percent to about 687,000.

Multi-purpose vehicle deliveries also increased 13 percent to some 52,000, but minibus sales fell 9.5 percent to around 15,000.

The downturn in new commercial vehicles such as trucks and buses continued, slumping 17 percent to about 250,000.

In total, deliveries of new vehicles in China rose 19 percent to approach 1.74 million in February.

In the first two months, overall new-vehicle sales increased 7.5 percent to 4.27 million.

In the period, light-vehicle sales rose 14 percent to 3.67 million while commercial-vehicle deliveries slumped 22 percent to around 597,000.

"We remain cautiously optimistic about the future development of the industry," Chen Shihua, deputy secretary general of CAAM, said on Friday. "Affected by the current conflict between Russia and Ukraine, the external environment of the industry is more complicated."

CAAM said last year China exported more than 100,000 vehicles to Russia and less than 10,000 vehicles to Ukraine, about 5 percent to 6 percent of China's total auto exports.

"The Russia-Ukraine conflict will have some impact on China's export enterprises," Chen said. "But it is hard to assess the impact as the situation is not clear."

The auto industry is also still facing a global shortage of chips that are used in everything from brake sensors to power steering, leading to production cuts that are hurting sales.

"In addition, factors such as the chip shortage and rising raw material costs still affect the production and operation of enterprises," Chen said.

The development of NEVs is facing increased uncertainty, especially because of a shortage of lithium that is used to make batteries, another trade group, the China Passenger Car Association, said earlier this week.

Prices of lithium, nickel and other raw materials key to the NEV supply chain have surged and are expected to rise further as supplies are disrupted due to Russia's invasion of Ukraine.

Reuters contributed to this report.