New vehicle sales in China surged 24% to 2,502,000 units in June 2022 from 2,015,000 units a year ago, according to the China Association of Automobile Manufacturers (CAAM).

Vehicle sales rebounded last month after being held back by strict lockdowns in key cities in previous months, including Shanghai, as part of the government’s zero-covid policy. Restrictions there were mostly lifted at the end of May but rising cases in other cities, including Hong Kong, Macau and Wuhan, have since led to additional restrictions.

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Vehicle sales in June also benefited from a 50% purchase tax cut, to 5% from 10%, on fuel efficient passenger vehicles costing up to CNY300,000 (US$45,000), and with engines no larger than two litres, until the end of 2022. This was expected to provide a significant lift to the market in the second half.

First half volume was down 7% to 12,057,000 units from 12,891,000 units a year earlier, with sales plunging 24% in the three months to the end of May due mainly to Covid lockdowns. H1 passenger vehicle sales increased by 3.4% to 10,355,000 units, driven mainly by surging NEV sales, while commercial vehicle sales plunged 41% to 1,702,000 units.

NEV volume jumped 129% to 596,000 units in June and 115% to 2,600,000 units year to date including 2,065,000 battery electrics. The government is considering extending the current NEV incentives beyond the end of the year.

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Preliminary data analysed by GlobalData indicates that, in June, which is normally a slow sales month in the year, the selling rate soared to 32.9 mn units, up 40% from the previous month. That followed a 65% MoM increase in May.

Manufacturer performance

The largest Chinese vehicle manufacturing group, Shanghai-based SAIC Motor, saw global sales surge fall 47% YoY to 483,584 units in June but volume was still down 3% to 2,234,291 YTD.

Overseas sales rebounded by 59% to 84,134 vehicles last month and were up 48% to 380,986 units in the first half.

SAIC-Volkswagen H1 sales were up 8% at 574,677 units, after almost doubling to 126,038 units in June while SAIC-GM sales rebounded by over 47% to 125,320 last month but were down 13% at 506,722 units YTD as the automaker struggled with the global semiconductor shortage. SAIC-GM-Wuling deliveries rose 29% to 120,000 units in June but first half sales were still down 6% at 622,074 units.

SAIC Motor own passenger vehicle sales continued to rebound in June, by 76% to 82,603 units, and were up 22% to 365,805 units YTD, while the wholly-owned SAIC-Maxus subsidiary saw sales continue to fall, by 12% to 17,695 last month and 15% to 90,035 in the first half.

General Motors said China sales contracted 28% to 1,097,600 units in the first half, including sales by its minority held joint ventures, following a 36% drop in Q2 as the company struggled with the Covid lockdowns in Shanghai and ongoing semiconductor shortages. Ford China sales fell 22% to 125,000 in Q2 with YTD sales of 214,000 units.

GAC Group sales rose 41% to 234,394 units in June and 12% to 1.1 million units YTD, with GAC Toyota up 20% at 500,200 units and GAC Honda volume were down 4% to 357,447 units.

BYD global NEV sales jumped by 163% to 134,036 units in June while its H1 sales, including non-NEVs, surged 162% to 646,399 units in the first half.

Last March, the company switched its entire product line to NEVs, including electric and hybrid vehicles, sales of which jumped 315% to 641,350 units YTD. Global EV sales surged 247% to 69,544 units in June and 246% to 323,519 YTD.

Tesla China increased global EV sales by 138% to 78,906 units in June, including a reported 77,938 units sold locally, while H1 sales were up 70% to 294,757 units YTD despite covid lockdowns in Shanghai [where the Chinese assembly plant is located] in April and May.

Tesla maintained its status as the world’s largest global EV manufacturer in the first half of 2022 with sales rising by 46% YoY to 563,987 units.