New-vehicle sales accelerated in May after resuming growth the previous month in the wake of the coronavirus outbreak, which forced the shutdown of factories and showrooms across much of China.
Industry-wide sales advanced 15 percent to nearly 2.2 million in May after increasing 4.4 percent in April, according to information the China Association of Automobile Manufacturers released Thursday.
The growth was led by demand for commercial vehicles, especially trucks, as Beijing ramps up investment in infrastructure projects to revive the economy.
Commercial-vehicle sales surged 48 percent to 520,000 in May, while light-vehicle deliveries rose 7 percent to nearly 1.7 million.
But demand for new electrified vehicles remains weaker, slipping 24 percent to roughly 82,000 last month, after the Chinese government slashed subsidies for EVs and plug-in hybrids in June 2019. The tally includes some 64,000 EVs and 18,000 plug-in hybrids, declines of 25 percent and 16 percent compared with a year earlier.
In the first five months, new-vehicle deliveries in China fell 23 percent to below 8 million because of dismal demand in the first quarter, when the outbreak raged across the country.
In a related report, car sales in China rose for the first time in almost a year last month, evidence that the world’s largest auto market is rebounding from the crisis and a trade war with the U.S.
Retail sales of cars, crossovers, SUVs and multiple-purpose vehicles increased 1.9 percent from a year earlier to 1.64 million units in May, the China Passenger Car Association said Monday. That’s the first gain since June 2019.
The government added stimulus measures such as tax rebates to attract consumers back to showrooms, while automakers that shuttered operations amid the coronavirus outbreak now offer generous discounts. The pandemic exacerbated a sales slump that’s in its third year, with an economic slowdown, trade tensions and stricter emission standards weighing on demand.
Global automakers spent billions of dollars expanding in China in recent decades, and manufacturers such as Tesla Inc., General Motors Co. and Volkswagen Group remain undeterred in their effort to tap the market’s long-term growth potential, including for EVs.
VW said this month it will become the biggest shareholder of battery company Guoxuan High-Tech Co., and it seeks a 50 percent stake in a Chinese EV partner.
Tesla was the top seller of new-energy vehicles with 11,095 deliveries in May, PCA said. The U.S. company started shipments from a new Shanghai factory around the start of the year. Monthly registrations of new Tesla vehicles in China have fluctuated this year amid the virus, from a low of 2,314 in February to a high of 12,710 in March, according to data from state-backed China Automotive Information Net.
After growing rapidly for several years, EV sales have also lost momentum because of the pandemic and slumping oil prices have made gas guzzlers more competitive. The government still considers EVs a priority, and has added a slew of fresh stimulus measures to help the industry recover.
Full-year car sales in China may fall about 10 percent following big declines at the height of the virus crisis earlier this year, PCA Secretary General Cui Dongshu said on a media call. His view is more optimistic than that of China Association of Automobile Manufacturers, which forecast a decline of 15 percent to 25 percent.
Bloomberg contributed to this report.
