Pace picks up for auto sales

Automakers in China may recover faster than expected this year amid measures by the government to stabilize vehicle demand.

Vehicle sales in the world’s largest car market could rise 6.5 percent this year from 2020, larger than the 4 percent increase projected in January, said Xu Haidong, deputy chief engineer at the China Association of Automobile Manufacturers.

A formal revision on the 2021 vehicle sales target will be published in July, he said.

The government has said it will work to encourage “steady increases” in spending on cars this year, a signal Beijing wants to ensure the auto sector has a robust future. Overall vehicle sales are expected to rise this year for the first time since 2017, CAAM said earlier.

New energy vehicle sales could surge 46 percent to more than 2 million units this year, Xu estimated, adding shares of EVs may reach 20 percent to 25 percent of total car sales by 2025. Premier Li Keqiang told the National People’s Congress in March that more car parks, EV charging stations and battery-swapping facilities will also be built, and battery recycling systems developed at a faster pace.

Passenger vehicle sales may gain 10 percent this year, Xu said.

NEV makers, such as Tesla, Nio, Xpeng and BYD (1211), are expanding manufacturing capacity in China.

China could extend tax exemptions on NEV purchases beyond 2022 to support development of the sector, Wan Gang, a high-ranking policy adviser who is often referred to in state media as China’s “father of EV,” said last week.

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