China Car Sales Rise Again, Cementing Pandemic Recovery

By Yoko Kubota

Car sales in China, the world's largest auto market, rose for a fifth straight month in November, as strong demand and policy stimulus continued to cement the recovery from the coronavirus pandemic.

Passenger car sales grew 8% to 2.1 million vehicles last month from a year earlier, the China Passenger Car Association said Tuesday. In October, sales rose by 8%.

In China, where the coronavirus outbreak has been brought under control for months, the economy has rebounded and auto spending is a major driver of that. To boost sales, China's cabinet and local governments have been easing purchase quotas and giving subsidies to car buyers.

Meanwhile, global auto makers, grappling with weak sales in other major markets where the coronavirus infections are surging again, have come to rely on China.

Honda Motor Co. said last week that its China sales increased 22% in November from a year earlier, while sales at Nissan Motor Co. rose 5.2%.

For the full-year, the industry group expects car sales to drop by 7%, due to the coronavirus-induced slump earlier in the year.

But it is forecasting a growth of 7% in 2021 -- in line with many auto analysts' forecasts of a high-single-digit annual growth. In the first half of the year, sales could jump around 30% because of a low basis a year ago, said Cui Dongshu, secretary-general of the CPCA.

Strong sales of electric cars also contributed to the overall market's rebound. Wholesale sales of so-called new-energy vehicles, a category that includes electric cars, surged by 128% last month to 180,000 vehicles, the industry group said. Retail sales figures weren't available.

The rebound follows a yearlong slump in EV sales that lasted until the summer. The types of electric car buyers in China -- for years led by ride-hailing fleets and government purchases -- have shifted recently to consumers, including those in big cities buying high-end EVs as well as those in rural areas purchasing cheaper, mini-EVs, said Jing Yang, director of corporate research at Fitch Ratings.

The bestselling EV in China was the $4,300 mini-EV, produced by General Motors Co.'s China joint venture Wuling, having sold 36,070 vehicles. Tesla Inc.'s Model 3 sedans came second at 21,604 vehicles -- a 78% increase from October, according to CPCA data.

Last month, China's auto industry regulator gave approval to Tesla to sell its made-in-Shanghai Model Y sport utility vehicles. Tesla plans to start delivering its Model Ys in China next year.

Since July, the Chinese government has been subsidizing purchases of dozens of selected electric cars, mostly domestic brands, in rural regions. It has also been building more charging facilities. Analysts expect such policies, as well as the launch of new models, to continue buoying EV sales growth into next year.

--Raffaele Huang contributed to this article.

Write to Yoko Kubota at [e-mail]

(END) Dow Jones Newswires

12-08-20 0700ET