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BEIJING – Auto sales in China rose 27% in the first half of 2021 from a year earlier, but were still below pre-pandemic levels, and production and sales fell in June in due to the global shortage of processor chips, an industry group reported on Friday.
Sales of SUVs, sedans and minivans from January to June in the world’s largest industry market reached 10 million, the China Association of Automobile Manufacturers said. Total sales of vehicles, including trucks and buses, increased 25.6% from the previous year to 12.9 million.
Compared to pre-pandemic levels in 2019, passenger vehicle sales fell 1.4% in the first half, according to the association. Total vehicle sales fell 4.4%.
Production of passenger vehicles fell 13.7% in June from a year earlier, while sales fell 11.1% to 1.6 million.
Sales showed an “obvious decline after May,” the manufacturer group said in a statement. “Passenger vehicles were mainly affected by an insufficient supply of chips.”
China’s auto demand was already weakening amid consumer unease over slowing economic growth and a trade war with Washington before dealerships closed last year to combat the virus outbreak.
China’s economy reopened relatively soon after the ruling Communist Party declared victory over the virus in March. But passenger vehicle sales fell 22.4% in the first half of 2020, setting a low basis for comparison this year. Annual sales in 2020 fell for a third year.
This is reducing the cash flow of global and Chinese automakers who spend billions of dollars developing electric vehicles to meet government sales quotas.
This year’s demand has been supported by sales of electric vehicles and gasoline-electric hybrids, although they still only represent a fraction of the total.
Sales of electric vehicles in the first half of 2020 rose 200% to 1.2 million, but demand for them is also cooling, according to the association. Sales growth in June slowed to 140% from a year earlier, reaching 256,000 vehicles.
Chinese brand passenger car sales in the first half of 2020 increased 46.8 percent from the previous year to 4.2 million. Their market share increased by 5.7 percentage points to 42%.
The global shortage of computer chips has also forced U.S. automakers to cut production this spring. The result was far fewer vehicles on dealer lots, just as the declining pandemic fueled pent-up consumer demand for cars, trucks and SUVs.
At the same time, used car prices have soared due to the demand created by the slowdown in the production of new cars. The supply of used cars has been reduced because car rental companies have had to buy used vehicles to rebuild their fleets, much of which was sold during the pandemic.
Information for this article was provided by Tom Krisher and Christopher Rugaber of The Associated Press.
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