China car sales rose by more than a third in the first three weeks of May from the same period in April.
But the China Passenger Car Association (CPCA) data showed China passenger vehicle sales fell 16% from the same period a year earlier to 780,000 units, despite the 34% gain over April.
The country’s latest outbreak of Covid-19 is leading to falls in incomes, depressing car sales, the CPCA said, the association said.
China car sales data showed the country’s car market, the world’s largest, had rebounded from a deep dive in April, when Shanghai and other cities were strictly locked down to control Covid-19.
However, the figures also underscored how much further it needed to gain to get back to year-earlier sales levels.
Subsidies for Electric Vehicles
China will strive to achieve reasonable economic growth in the second quarter and stem rising unemployment, Premier Li Keqiang was quoted as saying on Wednesday.
China’s policymakers have been in talks with carmakers about extending costly subsidies for electric vehicles that were set to expire in 2022, aiming to keep a key market growing as the broader economy slows, Reuters reported earlier this month.
In a statement on Thursday, the CPCA said stimulus measures from local governments would provide only short-term support for the market. It urged the government to adopt a stronger policy to put the industry back on track for sustainable recovery.
Sales of electric vehicles and plug-in hybrids, backed by government subsidies, have been the fastest-growing segment of China’s market.
- Reuters, with additional editing by George Russell