Market contracts 35% in January, trade group estimates

Retail sales of new light vehicles in China slipped 35 percent in January from a year earlier because of the COVID pandemic, lack of incentives and fewer working days, the China Automobile Dealers Association estimates. 

Some 1.36 million new sedans, crossovers, SUVs and multi-purpose vehicles were delivered last month, the trade group said this week, drawing on a preliminary tally. 

Among the deliveries, roughly 360,000 were full electric vehicles and plug-in hybrids, an increase of 1.8 percent from a year earlier, it added. 

CADA blames the overall market slump on the worst coronavirus outbreak China has experienced, the termination of government subsidies for electrified vehicles and tax cut on gasoline cars, and fewer working days because of the Chinese New Year holiday.

On December 7, Beijing suddenly ditched its zero-COVID policy and eased nearly all restrictions on travel and work. Shortly after, coronavirus infections swept across the country. 

On December 31, a decade-long subsidy program for EVs and plug-in hybrids, and a six-month long cut in sales taxes on gasoline vehicles, were both terminated.

The week-long Chinese New Year holiday ran this year from January 21 through January 27. In 2022, the holiday started on January 31.