(WSJ) Auto sales in China rose for a fourth straight month in October, as the country’s rebound from the coronavirus pandemic gained momentum.
Sales increased 8% in October from a year earlier to just under 2 million vehicles, the China Passenger Car Association said Monday. Growth in the higher end market outpaced that in the mass market, rising 30% from last year, the association said, continuing a trend that has persisted through the recovery.
China’s strong rebound has made it a much-needed source of strength for global auto makers whose sales are still weak in some Western markets that are now facing the prospect of a resurgence in infections.
The virus has been brought largely under control in China for several months, and retail sales more broadly began to grow again on a yearly basis in August amid a return in consumer confidence, according to the official National Bureau of Statistics.
Improving consumer sentiment has coincided with new model launches and deep discounting to power China’s auto recovery more strongly than many analysts had predicted, said Jing Yang, director of corporate research at Fitch Ratings. Demand should remain firm through the end of 2020 as consumers take advantage of deals that are set to expire in the new year, she said.
Red-hot demand for luxury cars and a rebound in electric-vehicle sales—which more than doubled in year-over-year terms in October to 144,000 units—have boosted the recovery. Tesla Inc. sold 12,143 locally built Model 3 sedans during the month and exported an additional 10,000 models to Europe in the first such shipment from the company’s Shanghai plant, said Cui Dongshu, secretary-general of the passenger-car association.
Tesla is now gearing up for production of the Model Y midsize sport-utility vehicle at its Shanghai plant, having spent this year expanding the facility. Analysts expect production to begin early next year.
Commercial vehicle sales, which were up 20% year-over-year to 1.34 million in the third quarter according to Fitch, have been an additional driver for China’s post-pandemic auto market. Truck sales were especially strong as the Chinese authorities pushed new infrastructure projects to help stimulate the economy.
The better-than-expected rebound in China has buoyed auto makers that had been facing the prospect of a disastrous 2020, as the pandemic dragged sales in the first quarter down by 41% in year-over-year terms. After the recovery, sales are now on track to decline by only 7% in 2020, the association forecasts, before returning to growth again in 2021.
“The downturn in the overseas auto market impacted by the epidemic is in sharp contrast with the vigorous recovery of China’s auto market,” Mr. Cui noted.
Toyota Motor Corp. said its China sales increased by 33% in October year-over-year, while Nissan Motor Co. grew its China sales by 5%.
Several auto makers also reported strong quarterly figures for the July-to-September period in China, which contrasted with declining sales elsewhere. BMW AG sales were up 31% year-over-year in the quarter, while Daimler AG said sales of Mercedes-Benz cars increased 24%. Ford Motor Co. ’s quarterly China sales increased 22% from a year earlier, while Honda Motor Co. ’s were up 20% and General Motors Co. ’s grew 12%.
In their recent quarterly earnings calls, BMW and Daimler both said their China sales had reached all-time highs.
Source: Wall Street Journal by Trefor Moss
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