China passenger car sales in May mark first gain in 2 years

SHANGHAI -- New-vehicle sales in China have increased the past two months, recording 14.5% annual growth in May to 2.194 million units and stoking optimism in the world's largest auto market, which had slumped due to the coronavirus pandemic.

The news reflects continued growth in the sector, which rose 4.4% in April.

The figure for May includes the first increase in passenger vehicle sales since June 2018, driven by government efforts to jump-start the sluggish economy, the China Association of Automobile Manufacturers revealed on Thursday. Sales of passenger vehicles -- which account for more than three-quarters of total sales -- jumped 7% to 1.674 million units.

Commercial vehicle sales continued to expand, rising 48% to 520,000 units.

The association said the recovery was led by policy measures that increased consumer confidence and released pent-up demand.

Analysts at Shanghai's Industrial Securities are optimistic on passenger vehicle sales for the full year based on stimulus policies in major cities across China, saying, "The momentum created in the second quarter will be the turning point for growth."

Rebates offered by local governments and deals from automakers helped fuel demand. BYD gave rebates of up to 5,000 yuan ($707) last month in line with stimulus measures by the Pingshan district government in Shenzhen, where the automaker is located, according to local media outlet

Foreign automakers like BMW also tried to cash in on pent-up demand by offering low interest rates and trade-in rebates of up to 24,000 yuan.

Shanghai Securities in a recent report maintained its "overweight" rating for the automotive sector, citing economic stimulus policy.

Read more:

News more