HomeBusinessChina Car Sales Jump as Covid Curbs Relaxed

China Car Sales Jump as Covid Curbs Relaxed


HONG KONG—China’s car sales rose almost 23% in June from a year earlier as production recovered in lockdown-hit Shanghai to meet pent-up demand and government cash incentives stimulated purchases in the world’s biggest auto market.

Sales for passenger cars also rose sharply to 1.94 million in June from 1.35 million vehicles in May, the China Passenger Car Association said Friday, a sign of buyers making up for lost time after falls in recent months caused by pessimism over the economy and social restrictions to fight the pandemic.

Production also grew 46% from a year ago to 2.2 million vehicles, signaling that the industry has mostly recovered its capacity following a slump as China imposed tough lockdowns amid a Covid-19 outbreak that affected its automotive manufacturing center near Shanghai.

The passenger-car market saw “explosive growth” in June, said Cui Dongshu, the association’s secretary-general.

The production recovery was due to lessening shortages in imported car parts, which allowed manufacturers in the Yangtze Delta area to resume supply. A multiplier effect from the supply chain’s recovery, export resilience and government stimulus also ensured the market’s growth, he said.

Tesla Inc.

TSLA 5.53%

was among car makers seeing the strongest rebound following a three-month slump that ended in May. Last month it sold over 78,000 units, more than doubling that of May and up from just 1,512 vehicles in April, when its plant was unable to operate under Shanghai’s strict Covid-19 lockdown. Most of the June deliveries were sold domestically, with only 968 cars exported.

Sales at

Volkswagen AG’s

joint venture with Chinese state-owned partner

SAIC Motor Corp.

increased 51% in June from a year ago, but sales for

General Motors Co.

were down 21%.

The Warren Buffett-backed


1211 -1.29%

Ltd, meanwhile, recorded a 177% increase in sales on-year. Sales by the Chinese manufacturer—which included fully electric and hybrid vehicles—surpassed Tesla’s global output during the first half of this year.

To give another boost to the car market after cutting vehicle purchase tax at a cost of almost $9 billion in May, the Chinese central government on Thursday rolled out a policy package to encourage new vehicle sales by allowing secondhand vehicles to be sold across the country.

Shares of Chinese electric car makers including BYD and startups including

NIO Inc.,

Li Auto Inc.


XPeng Inc.

rose Thursday after a memo said the government would consider extending its tax exemption for new-energy vehicles purchases. The exemption was set to expire by the end of 2022. Local governments are also being asked to remove all local protectionist measures, and to work on adding parking spaces and charging stations for EVs in their urban renewal plans, the memo read.

Write to Selina Cheng at [email protected]

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