Vehicle sales in China recorded their first decline in 14 months. This is according to data recently published by the China Association of Automobile Manufacturers (CAAM). In addition, it should be noted that the country's car manufacturers have also been affected by the ongoing chip shortage. Despite all this, CAAM is optimistic that sales will rise for the year as a whole.
After 13 consecutive months of growth, car sales in China fell for the whole of May. Over the whole period, they fell by 3% year-on-year (compared to May 2020). As a result, the world's largest car market recorded sales of 2.13 million vehicles last month.
In the month under review, sales of new energy vehicles (NEVs) continued to show strong momentum. They showed a clear increase of 160% to 217,000 units in May. As a reminder, this type of car includes battery electric vehicles as well as hydrogen powered vehicles.
Plug-in gasoline-electric hybrids are also included in this category of cars. In addition, China recorded sales of approximately 10.88 million vehicles in the first five months of 2021 (January to May). This represents a growth of 36% compared to the same period last year.
The China Association of Automobile Manufacturers (CAAM) has estimated that the country's automobile manufacturers have been facing enormous difficulties recently. The global shortage of chips is one source of the problems faced by these manufacturers.
Indeed, this shortage, which has lasted for several months, has affected several sectors of activity. In particular, it has had a major negative impact on car manufacturers in China. They have also been affected by the rise in raw material prices.
However, CAAM is very optimistic about the sector's prospects for 2021. For example, it is targeting an increase in total vehicle sales in China this year. Sales growth is expected to be 6.5%.
Environmental protection is an issue that is at the heart of China's concerns. In fact, it is an important part of the Chinese government's development programme. In particular, it is working to reduce air pollution in the country.
To this end, it is actively encouraging the development of more environmentally friendly cars. NEV manufacturers such as Nio Inc, Xpeng Inc and BYD support this Chinese government perspective through the vehicle models they manufacture.
And they intend to continue to do so. Indeed, the NEV manufacturers are already working hard to increase their production capacity in China. This is undoubtedly good news for the Chinese government.