Chinese industry body cuts 2022 auto sales growth forecast to 3%

0

Cars drive on the road during the morning rush hour in Beijing, China July 2, 2019. REUTERS/Jason Lee

Join now for FREE unlimited access to Reuters.com

Register

SHANGHAI, July 11 (Reuters) – China’s auto industry association lowered its 2022 sales forecast on Monday as anti-pandemic measures weighed on the economy and its world’s largest auto market .

The industry will sell 27 million cars this year, up 3% from 2021, according to the China Association of Automobile Manufacturers’ forecast, trimming its outlook from 27.5 million sales and growth in 5.4% it expected in December

Weak demand for commercial vehicles was a factor in the downgrade, the association said at a regularly scheduled news conference on Monday. He now expects commercial vehicle sales to fall 16% to 4 million units.

Join now for FREE unlimited access to Reuters.com

Register

Overall growth of around 3% compared to the 4.4% achieved in 2021 and the drop of 1.9% in 2020.

China’s auto sector has been hit hard in recent months by China’s efforts to combat COVID-19. The government has at times placed many parts of the country, including Shanghai, under strict control.

Authorities are trying various incentives to revive the car market, with the central government last month halving the purchase tax to 5% for cars priced below 300,000 yuan ($45,000) and whose engines do not exceed 2.0 litres.

The tax relief affected purchases of nearly 1.1 million vehicles, resulting in a tax loss of 7.1 billion yuan ($1 billion) for the government, the People’s Daily said.

Many of the policies were aimed at encouraging sales of new energy vehicles (NEVs). In May and June, some local governments began offering subsidies to consumers willing to trade in gasoline-powered vehicles for electric cars.

Some cities have also expanded car ownership quotas.

These policies helped create an annual increase in sales seen in June, after four months of decline. The industry sold 2.5 million vehicles in June, up 23.8% from a year earlier, the association said.

June sales were also up 34.4% from May, sales of NEVs, which include electric vehicles, plug-in gasoline-electric hybrids and hydrogen fuel cell vehicles, were up 129.2 % compared to the previous year.

As it cut its annual projection, the association revised its full-year NEV sales forecast up, saying 5.5 million units would likely be sold, up more than 56% and compared to last year’s 47% growth. Passenger car sales for the year would likely increase by around 7%.

Although June sales were buoyant, there are fears that demand could be hit again as COVID cases increase with the arrival of the BA.5 Omicron sub-variant in China.

Cities are imposing new restrictions to curb new clusters, ranging from business suspensions to closures, and Shanghai is preparing for another mass testing campaign. Read more

Join now for FREE unlimited access to Reuters.com

Register

Reporting by Zhang Yan and Brenda Goh; Editing by Clarence Fernandez and Bradley Perrett

Our standards: The Thomson Reuters Trust Principles.

Share.

Comments are closed.