China's auto market recovering fast, outlook positive

China's automotive market is recovering fast, with sales of both new-energy vehicles (NEVs) and conventional internal-combustion engine vehicles returning to growth, Cui Dongshu, secretary general of the China Passenger Car Association (CPCA), observed during a seminar on May 9. "We should be confident that China's car market will recover to the level seen in 2021," he noted.

During that year, domestic sales of automobiles increased by 3.8% on year to 26.27 million units, while output grew by 3.4% on year to 26.08 million units, according to data from the China Association of Automobile Manufacturers.

Last month, sales of passenger cars across China reached 1.63 million units, soaring by 55% on year, mainly due to the low base in the same month last year, with the COVID-19 pandemic emerging in regions such as Shanghai and Northeast China's Jilin, the CPCA reported in its latest monthly report on China's passenger car market.

April's performance was also a 2.5% improvement on March, making it one of the only two on-month rises recorded for any April since 2010, the latest CPCA data indicated. Behind the rise was the release of pent-up demand, plus the desire among car buyers to take to the road to enjoy last week's Labour Day holiday, the association's report explained.

On the other hand, during April China produced 1.76 million passenger cars, up 77.4% on year, though down 15.7% on month, as automobile companies kept output in check in a bid to clear inventories of models whose sale is soon to be banned, according to the CPCA report.

From July 1, China will begin enforcing revised exhaust-emission standards for vehicles nationwide, banning the production, import and sales of new automobiles that do not comply with the new National VI B emission standard, Mysteel Global notes.

The statistics released by CPCA also showed that during last month, China exported 300,000 passenger vehicles, 2.27 times higher on year, of which NEVs accounted for 91,000 units or 30.3% of the total exports - leaping by a massive 10.3 times on year and rising by 29.4% from March.

Regarding the auto market in May, "there are 21 working days this month, one day more than in the same period last year, which will be conducive to lifting automakers' production and sales," the CPCA report pointed out.

Meanwhile, China's sales of vehicles this month are expected to show another large on-year jump, as sales in May last year were negatively impacted by supply chain disruptions including the shortage of automotive semiconductors, the association observed.

Written by Rong Zhang, zhangronga@mysteel.com
Edited by Alyssa Ren, rentingting@mysteel.com

Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and SteelMint.