BEIJING/SHANGHAI, June 8 (Reuters) – Sales of passenger vehicles in China rose 7.3 percent in May from the previous month, industry data showed on Thursday, as the government extended incentives fiscal to bolster demand amid a weak economic recovery.
Sales totaled 1.76 million vehicles in May, the China Passenger Car Association (CPCA) said. From January to May, sales rose 4% to 7.74 million cars compared to the same period a year earlier.
Sales of new energy vehicles (NEVs), which include battery cars and gasoline-electric plug-in hybrids, rose 10.5% in May from April and accounted for 32.9% of total sales for May, according to CPCA data.
Tesla sold 77,695 Chinese-made vehicles in May, CPCA data showed earlier this week. The industry body did not provide a breakdown of export data by car brand.
The discount push since March has gradually faded, but the price cuts remain attractive to Chinese consumers.
In addition, a number of new products and new low-priced models have been launched recently, which have attracted buyers to the market again, said Cui Dongshu, secretary general of the association, at a press conference.
Falling NEV prices due to discounts and falling battery costs have yet to be reversed by Tesla’s shift to higher prices in countries like China. However, NEV sales that specify big-ticket spending have undercut a tepid rebound in overall consumption after China abruptly ended its COVID-19 containment measures late last year.
The weak recovery in car sales has weighed on profitability. Some suppliers of state-owned Chongqing Changan Automobile Co Ltd ( 000625.SZ ) have protested a payment cut by the carmaker, saying they are being forced to pay for the price cut, Reuters reported.
Changan denied allegations that it had arbitrarily reduced payments to suppliers by 10 percent, according to a statement sent to Reuters.
The government plans to expand and optimize tax incentives for NEV purchases and study policies to promote NEV development, state media reported Friday, citing cabinet discussions.
The foundations of the economic recovery are still not solid, state media reported, citing the discussions.
In mid-May, the National Development and Reform Commission and the National Energy Administration announced guidelines to accelerate the construction of electric vehicle charging facilities to boost rural NEV purchases.
Reporting by Qiaoyi Li, Zhang Yan and Brenda Goh; Editing by Christopher Cushing, Peter Graff and Kim Coghill
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