China's auto market rebounds in April as work resumption quickens

China's auto production and sales rebounded in April thanks to a slew of government stimulus measures and the accelerating restoration of business activities, official data showed on Monday.

New energy vehicles are seen on the assembly line at Xi'an plant of BYD Auto in Xi'an, northwest China's Shaanxi Province, June 12, 2019. [File photo/Xinhua]

Automobile sales increased by 4.4 percent year on year to 2.07 million units last month, ending a contraction streak over the past 21 months, the China Association of Automobile Manufacturers (CAAM) said at an online press conference.

Output hit 2.1 million units, up 2.3 percent year on year.

Monthly, the output and sales soared 46.6 percent and 43.5 percent, respectively.

In breakdown, output and sales of commercial cars both hit a monthly record high in April, climbing 31.3 percent and 31.6 percent year on year to 514,000 units and 534,000 units, respectively.

Meanwhile, the output of new energy vehicles slid 22.1 percent year on year, while the sales dropped 26.5 percent, said the CAAM.

During the first four months, China's auto production and sales came in at 5.6 million units and 5.76 million units, down 33.4 percent and 31.1 percent year on year, respectively.

Expansion in the auto market in April could be partly attributed to the accelerating restoration of business activities, the CAAM noted, saying that dwindling COVID-19 cases in the country and government stimulus measures facilitated industry recovery.

Some 204 production bases of 23 major complete vehicle manufacturers, whose annual sales volume accounted for over 96 percent of the nation's total, have basically resumed production, it said.

With the April pick-up in both production and sales, the association predicts that the auto sector will sustain a warming-up momentum in May.

To prop up the market, authorities have announced a slew of measures including extending preferential tax policies, loosening purchase restrictions in certain cities, and invigorating the used car market to unleash the consumption potential.

On April 28, some 11 departments including the National Development and Reform Commission and China Banking and Insurance Regulatory Commission jointly issued a circular, urging efforts to further stabilize and expand car consumption.

More efforts will be made to increase support for personal auto consumption credit and further release the auto consumption potential by appropriately lowering the down payment ratio and loan interest rate as well as extending the repayment period, said the circular.

The move came after the government had announced to extend subsidies and tax exemptions for new energy vehicle purchases by another two years, which were set to expire at the end of this year.

With the implementation of these preferential policies, the production enthusiasm of enterprises in the sector and auto consumption will be further boosted, promoting market recovery, the CAAM said.

However, domestic industry players still faced pressure from shocks of the COVID-19 pandemic as the driving force for commodity consumption remained weak and the supply chain risks of some auto parts were increasing, it noted.