China Auto Sales Bounce Back From Coronavirus-Hit Worst-Ever Quarter

By Erin Mendell

China's auto market continued to rebound from damage from the new coronavirus, though dealerships haven't turned optimistic about consumer sentiment.

Sales in the country increased 11.6% in June from a year earlier to 2.3 million vehicles, the government-backed China Association of Automobile Manufacturers said Friday.

The world's biggest auto market recorded a 10.4% increase in vehicle sales in the second quarter, based on The Wall Street Journal's calculation, as factories resumed production and government policies boosted auto purchases. Sales slid 42.4% in the first quarter and have been rising since April, mostly driven by demand for commercial vehicles.

Ford Motor Co. said its second-quarter sales in China rose 3% from a year earlier, while those of General Motors Co. and Nissan Motor Co. dropped 5.3% and 3.9%, respectively.

The manufacturers association said Thursday that it doesn't expect Beijing to introduce strong stimulus for the industry in the second half, as China's auto market, less affected by international trade than other parts of the economy, has been recovering from the pandemic and performing more stably than many other industries.

Dealer inventory expanded last month, signaling weakened demand from consumers and intensifying pressure on dealerships, the China Automobile Dealers Association said Wednesday.

The official auto-dealer group said the market will likely cool this month following heavy promotions by car makers and dealers in May and June, and government policies introduced in May will likely erode demand in the third quarter.

Car sales from auto makers to dealerships have been outpacing those from retailers to consumers, exposing a gap between real market demand and official sales figures. Retail sales of passenger cars declined by 6.2% in June from a year earlier, according to the China Passenger Car Association.

Sales of new-energy vehicles, which include electric cars, fell 33.1% last month from a year earlier to 104,000 vehicles, the CAAM said.

Tesla sold 14,954 China-built Model 3s in June, surging 35% from May, according to passenger-car association data.

Raffaele Huang contributed to this article.

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