Automobile imports and exports from China continued their recovery in August, according to data provided by the China Association of Automobile Manufacturers (CAAM). Citing customs data, the Association reported that import and export volume totaled $13.48 billion, up 4.1% year-on-year.
Month on month, auto imports in August were up 10.6% to $7.11 billion, while exports rose 7.6% to $6.37 billion.
During the January to August 2020 period, CAAM data reveals that auto imports and exports fell 16.3% year-on-year at a total of $87.39 billion.
The coronavirus pandemic and resulting lockdown had a significant impact on China’s auto industry, but sales began to rise in April, up 4.4% compared to April 2019. This growth was attributed to pent-up demand, as well as vigorous supportive government policies aimed at stimulating the domestic auto industry. CAAM says that growth in April ended a contraction streak over the previous 21 months.
CAAM has estimated that auto sales in China will grow further in the second half of the year, but is likely to shrink by around 10% for the entire calendar year 2020 as losses in the first quarter of the year (when the country was most severely hit by the COVID19 pandemic) were too great to offset.
Mr.Fu Bingfeng, secretary general of the China Association of Automobile Manufacturers (CAAM), said the sales of new-energy vehicles (China’s term for electric and hybrid vehicles) are expected to maintain be stable in the second half of 2020. The country currently has 4.6 million new energy vehicles (NEVs) on the road. According to Mr.Fu, this is expected to rise to 5 million units by the end of this year, a target which he felt could be met, judging from the current situation.
Local governments in China have implemented favourable policies to support the development of NEVs. The country has extended subsidies for NEVs till 2022 and the vehicles will also remain exempt from purchase taxes for another two years.
This year, the Beijing municipal government is offering an additional 20,000 electric car plates for families who do not possess a car. Other cities such as Shanghai, Hangzhou in Zhejiang province, and Guangzhou and Shenzhen in Guangdong province also announced similar plans in offering more license plates. China has strict limits on number plate quotas for combustion engines vehicles.
The government hopes these policies will trigger pent-up demand from new customers.
Technological advancements, as well as the desire for improved products by Generation Z customers will increase annual sales of NEVs to 3 million units in 2025, according to a report released by Autohome. Last year, NEV sales in China were at 1.2 million units, based on data from the country’s Ministry of Industry and Information Technology. Mr.Xin Guobin, vice-minister of industry and information technology, said China is speeding up the announcement of the auto sector’s development plan from 2020 to 2035.
Based on a draft plan released in 2019, China aims to be a global leader in NEV-related technologies, with NEVs expected to make up 25% of total vehicle sales in the country by 2025.
Mr.Li Xianjun, director of automotive development research center at Tsinghua University, said the automobile industry needs to seize the strategic opportunity to achieve high-quality development.