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China's auto market makes good start, with recovery growth expected in 2021

February 19, 2021


Abstract : China's automobile market has made a good start with the outstanding performance in January, the Xinhua-run Economic Information Daily reported on Friday.

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People visit the 18th Guangzhou International Automobile Exhibition at the China Import and Export Fair Complex in Guangzhou, south China's Guangdong Province, Nov. 29, 2020. (Xinhua/Lu Hanxin)

BEIJING, Feb. 19 (Xinhua) -- China's automobile market has made a good start with the outstanding performance in January, the Xinhua-run Economic Information Daily reported on Friday. 

Industry insiders predict that the domestic automobile market will achieve recovery growth in 2021. 

-- Good start in auto market 

It is learned that the domestic automobile market usually sees a low season for sales in the month when the Spring Festival falls and the month after the festival. However, thanks to the country's efforts to encourage people to stay put during the festival to prevent the spread of COVID-19, many people went to the automobile 4S stores for inquiries and purchases. 

According to the China Association of Automobile Manufacturers (CAAM), in January 2021, the country's automobile production and sales stood at 2.388 million units and 2.503 million units, respectively, both showing a significant year-on-year increase. 

Data shows that after reversing the downtrend and achieving positive growth in sales in May 2020, the passenger cars have become the main force that continues to drive growth of the whole auto market. 

In January 2021, passenger car sales stood at 2.045 million units in the country, a year-on-year increase of 26.8 percent. 

Among the main categories of passenger vehicles, sedans and SUVs witnessed the most obvious growth. In January 2021, the country sold 974,000 sedans, a year-on-year increase of 31.6 percent, and 971,000 SUVs, a year-on-year increase of 25.2 percent. 

Specifically, the top 10 sedan manufacturers sold a total of 677,000 units, accounting for 69.5 percent of the total sedan sales. The top 10 SUV manufacturers in the country saw total sales of 632,000 units, accounting for 65.1 percent of the total SUV sales. 

Chen Shihua, deputy secretary-general of the CAAM, noted that from the perspective of market conditions, the overall demand in the domestic automobile market remains stable. To be specific, driven by truck sales, the monthly sales of commercial vehicles broke the historical records for 10 consecutive months and the new energy vehicles (NEVs) continued the growth trend of the second half of 2020.

-- Recovery growth throughout the year

Whether the good start can continue, most of the industry organizations and experts have predicted the continued recovery in the domestic automobile market and generally been bullish about the future performance. 

Xu Haidong, deputy chief engineer of the CAAM, predicted that China's auto market may grow by about 4 percent in 2021. In breakdown, passenger car sales are expected to reach 21.7 million units, an increase of about 7.5 percent year on year. Commercial vehicle sales may stand at 4.6 million units, down about 10 percent, while sales of the NEVs may reach 1.8 million units, an increase of about 40 percent. 

It is not easy to predict the specific growth in the auto market in 2021, but a year-on-year increase of 5 percent to 6 percent should still be possible, according to Zhao Ying, former director of the Division of Industrial Development under the Institute of Industrial Economics of Chinese Academy of Social Sciences. 

As for the future performance of the domestic auto market, the China Passenger Car Association (CPCA) is more optimistic. It pointed out that from the perspective of the development trend of the automobile industry, with the steady recovery of the national economy, the domestic automobile market will accelerate recovery in the consumption demand this year. Given the huge automobile market, 2021 will be a year of positive recovery growth. 

However, the CPCA also warned that the pressure of consumption growth in the auto market in 2021 cannot be ignored. It is expected that the auto market for the whole year will show an inverted V-shape. 

Unlike the above optimistic views, Lang Xuehong, deputy secretary-general of the China Automobile Dealers Association, is more cautious, when predicting the future performance. 

She believed that the domestic auto market in 2021 will still be under great pressure. The overall auto market will remain at around 25 million units in sales, which is the same as in 2020. The passenger cars will have a better performance than that of commercial vehicles, and are expected to achieve slight positive growth, with an increase within 3 percent. 

Under such circumstances, many car makers have set ambitious annual sales targets.

For example, China FAW Group Corporation revealed at its Hongqi brand annual meeting on February 1 that it plans to sell more than 4 million vehicles in 2021, an increase of more than 7.9 percent year on year. Among them, the NEV sales may exceed 200,000 units, a year-on-year increase of more than 300 percent. Hongqi sedans are expected to have sales of 400,000 units, a year-on-year increase of 100 percent. It aims to realize operating income of 770 billion yuan, a year-on-year increase of more than 10.6 percent. 

GAC Group said that it targets a 10-percent year-on-year increase in car sales for the year. Dongfeng Motor has set a 2021 business goal of selling 3.85 million vehicles. (Edited by Hu Pingchao with Xinhua Silk Road, hupingchao@xinhua.org)

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Keyword: NEV auto market

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