Vehicle sales up again in June, but annual outlook still bleak

Country's leading auto association expects yearly tallies to fall 10 to 20 percent from 2019

Carmakers are continuing to regain lost ground in China as the industry notched its third consecutive month of growth in June in the world's largest auto market, but the China Association of Automobile Manufacturers expected total sales in the year could fall by 10 percent to 20 percent from 2019.

A record 2.30 million vehicles were sold last month, soaring 11.6 percent year-on-year, according to statistics the China Association of Automobile Manufacturers released Friday.

Total vehicle sales in the first half of the year reached 10.26 million, a 16.9 percent fall year-on-year.

Chen Shihua, deputy secretary-general of the association, said "The better-than-expected growth is thanks to pent-up demand for passenger vehicles in the first quarter, and the record sales in the commercial vehicle sector."

Of the sales in June, 1.76 million were passenger cars, up merely 1.8 percent from the same month last year. The mainstay of the automotive industry, passenger vehicle sales were severely reduced earlier this year.

Though meager, the growth in June continued the momentum first spotted in May this year, a sign that the passenger vehicle segment is recovering from the pandemic and consumers have restored financial confidence.

Commercial vehicles including buses and trucks registered record sales last month. A total of 536,000 were sold, up 63.1 percent year-on-year. In the first half of the year, sales totaled 2.38 million, up 8.6 percent from the same period last year.

However, the association urged carmakers not to be overoptimistic. It said the stimuli plans that many cities have rolled out are an important contributing factor in the overall market's growth. When the stimuli disappear, sales may shrink.

In fact, commercial vehicles are the only automotive segment that have managed to secure positive growth from January through June in spite of the pandemic that hurt China's auto market badly early this year and still rages in other parts of the world.

In comparison, passenger car sales in the first half slumped 22.4 percent year-on-year. The new energy vehicle segment has not seen any monthly growth so far this year.

Sales of electric cars and plug-in hybrids totaled just 104,000 in June, down 33.1 percent from the same month in 2019, and deliveries in the first half totaled 393,000, a 37.4 percent fall.

Some companies, though, are outperforming the market. BMW said in the first half of 2020, sales of electrified models rose almost 50 percent compared to the same period last year.