What’s new: China’s auto sales rebounded by nearly 365% year-on-year in February to 1.46 million units, but the industry has yet to fully recover to pre-pandemic levels, data from an industry association showed.
The strong growth was partly due to the low basis of February 2020 when the country was hit hard by the Covid-19 outbreak, forcing businesses to shut down, according to Chen Shihua, deputy secretary general of China Association of Automobile Manufacturers (CAAM).
Sales of passenger vehicles for the first two months this year were 1.4% below the same period in 2019, indicating the industry has further ground to make up, Chen said.
What’s the context: Sales of passenger vehicles in February declined 43.5% from January as Beijing called for people across the country to avoid traveling during the Lunar New Year holiday because of virus concerns.
New-energy vehicles and luxury brands were the main drivers of passenger car sales this year.
China’s auto industry also faces challenges from a shortage of computer chips, forcing many manufacturers to cut production, Chen said. A lack of chips to power vehicle stability and control systems may reduce China’s first-quarter auto sales by 5% to 10%, according to Chen.
Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bobsimison@caixin.com).
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