Employees assemble cars at a vehicle manufacturer in Bozhou, East China's Anhui Province on July 12, 2022. Assembly lines at the manufacturer are busy stamping, welding, painting and putting together new cars despite hot weather. Photo: cnsphoto

Policies to boost vehicle sales in China may be extended if sales slump in the first quarter, an industry association said.

The purchase tax for conventional fuel vehicles was halved in June 2022, which greatly promoted the sector's recovery. Now, the industry is calling for the policy to be extended, Chen Shihua, deputy secretary general of the China Association of Automobile Manufacturers (CAAM), said on Thursday.

The policy expired at the end of last year. If sales plunge in the first quarter of 2023, related departments may consider extending it, said Xu Haidong, deputy chief engineer of the CAAM. 

Hitting by the latest Omicron outbreak and relatively weak consumption growth, vehicle production and sales grew more slowly in the fourth quarter of 2022, the association revealed in a report.

The figures sparked industry concerns that consumers' enthusiasm might cool without preferential policies.

Last year, the vehicle sector overcame multiple negative factors and resumed growth momentum. Production stood at 27.02 million units, up 3.4 percent year-on-year, while sales hit 26.86 million, up 2.1 percent.

Despite the modest overall performance, the new-energy vehicle (NEV) segment experienced notable expansion and topped the global market for the eighth consecutive year. 

NEV output in China came at 7.06 million units in 2022, rising 96.9 percent, and sales totaled 6.89 million, surging 93.4 percent.

China exported 679,000 NEVs in 2022, up 120 percent year-on-year. Overall auto exports stood at 3.11 million, up 54.4 percent.

Despite the headwinds, the development of the automobile industry in China has shown strong resilience and played an important role in stabilizing economic growth, the report said.

As China strives to expand domestic demand so as to boost economic growth, it is believed that the vitality of market entities and consumption will be further stimulated, and the automobile sector is expected to see 3 percent growth in 2023, the CAAM has predicted.

Global Times