China’s auto sales are expected to improve in September as the effect of the traditional peak season Golden Nine and Silver Ten ushers consumption, according to the China Automobile Dealers Association (CADA). Initial estimates show sales were up 11.3pc in August from a year ago at 2.18mn vehicles despite a traditional off-season. Auto sales are expected to increase in the second half of the year, despite an overall drop of around 10pc for the full year. Sales have picked up since April amid pent-up demand post the COVID-19 pandemic.

 

Launch of new cars during Beijing Auto Show and purchases for back-to-school season could also help the auto market recover in September. New car sales are expected in China’s rural regions with the introduction of the Automobile for Countryside Policy. In addition, manufacturers’ stress marketing and reducing inventories is all likely to spur sales. 

 

CADA’s Auto Consumption Index in August rose to 76.6. Auto dealers are confident of achieving their full year target, believes CADA. The association’s Vehicle Inventory Alert Index indicates improvement in August at 52.8pc, higher than July, but down 0.5 percentage points from the prior year. Market demand, average daily sales and business sentiments improved in August. On a regional basis, floods and typhoons impacted auto dealer in the southern region as store visits dropped and inventories rose.

 

During the Chengdu Auto Show, automakers received good response and a large number of orders were placed and some even delivered in August. CADA has, however, cautioned dealers from being too optimistic and said sales are expected to return to prior year level in September but growth is still slightly weak.

 

Electric mobility

Electric vehicle or New-energy vehicles as they are called in China are gaining market share among young Chinese buyers. Around 4.6mn new-energy vehicles have hit the road in China and the number is expected to cross 5mn by the end of 2020, as per CAAM data. 

Many provinces in China has extended subsidies for new energy vehicles until 2022 along with exemption on purchase tax. The Beijing municipality has offered additional 20,000 electric car registration for families residing in the capital. 

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