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Shanghai — The slump in commercial vehicle demand lowered sales forecasts on Monday as the Chinese Automobile Industry Association weighed on anti-pandemic measures on the world’s largest economy and car market.
The industry will sell 27 million vehicles this year, up 3% from 2021, and the China Automakers Association will lower its outlook from the December forecast of 27.5 million sales and 5.4% growth.
According to data from the association, the downgrade has progressed due to sluggish demand for commercial vehicles such as buses and trucks. Currently, commercial vehicle sales are expected to decline 16% to 4 million units.
The overall growth rate is about 3%, compared to the 4.4% decline achieved in 2021 and the 1.9% decline in 2020.
With the increasing number of cases of COVID-19, the automotive sector has been hit hard in recent months. The Chinese government may have severely blocked many parts of the country, including Shanghai.
Authorities have tried incentives to revive demand. Central authorities halved the purchase tax for cars with prices less than 300,000 yuan ($ 45,000) and engines below 2.0 liters to 5% last month.
Many policies aim to promote the sale of new energy vehicles (NEVs). In May and June, some local governments began offering subsidies for trade-in of gasoline-powered electric vehicles.
In some cities, car ownership allocations are also expanding.
Such a policy helped generate the annual sales increase seen in June after a four-month decline. According to the association, the industry sold 2.5 million units in June, an increase of 23.8% over the previous year.
However, the incentives helped little in demand for commercial vehicles awaiting recovery in logistics and infrastructure, a sector that requires more state support, said Xu Haidong, deputy chief engineer of the association. Said at a regular press conference on Monday.
Sales in June also increased by 34.4% from May, and sales of NEVs such as electric vehicles, plug-in gasoline electric hybrid vehicles and hydrogen fuel cell vehicles increased by 129.2% from the previous year.
The association lowered its annual forecast for overall sales, but revised NEV’s forecast, saying it could sell 5.5 million units, an increase of more than 56% compared to last year’s 47% growth. .. Annual passenger car sales can increase by about 7%.
Sales were strong in June, but demand will be hit again as the BA.5 Omicron subtype arrives in China and the city imposes new regulations, increasing the number of COVID-19 cases again. Is a concern.
China’s automotive industry will also face the lasting challenges of chip shortages and rising raw material costs, especially for electric vehicle batteries, said Chen Shihua, deputy secretary general of the association.
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