Moody's Investors Service said new policy guidelines affecting the Chinese auto industry supported its projection of a 2% growth in auto unit sales for the country in 2019.

"The new policy guidance follows weak auto sales in China so far in 2019," said Gerwin Ho, a Moody's senior credit officer.

According to the China Association of Automobile Manufacturers, auto sales were down 12% year on year for the four months between January and April 2019. The decline was because of weaker corporate and consumer sentiment, due to the ongoing US-China trade dispute, and also the high base of auto sales during the first half of 2018.

Moody's said the government announced policy guidance on promoting automobile renewal, upgrading and recycling, by encouraging the supply of fuel-efficient and new energy vehicles, the purchase of new energy vehicles, vehicle replacements, vehicle upgrades, used vehicle sales, auto financing, traffic infrastructure and vehicle scrappage systems, while discouraging controls on vehicle ownership.