China’s monthly car sales rise for first time in almost a year

HONG KONG: Car sales in China rose for the first time in almost a year last month, evidence that the world’s largest auto market is rebounding from the coronavirus crisis and the trade war with the United States.

Retail sales of cars, sport utility vehicles and multiple-purpose vehicles increased 1.9% from a year earlier to 1.64 million units in May, the China Passenger Car Association said yesterday.

That’s the first gain since June 2019. The government added stimulus measures such as tax rebates to attract consumers back to showrooms, while automakers that shuttered operations amid the coronavirus outbreak now offer generous discounts.

The pandemic exacerbated a sales slump that’s in its third year, with an economic slowdown, trade tensions and stricter emission standards weighing on demand.

Global automakers have spent billions of dollars expanding in China in recent decades, and manufacturers such as Tesla Inc, General Motors Co and Volkswagen AG remain undeterred in their effort to tap the market’s long-term growth potential, including for electric vehicles (EVS).

The German manufacturer said this month it will become the biggest shareholder of battery company Guoxuan High-tech Co, and it seeks a 50% stake in a Chinese EV partner.

The deal would mark Volkswagen’s first direct ownership in a Chinese battery maker and comes as the Wolfsburg-based automaker strives to meet a goal of selling 1.5 million new energy vehicles a year in China by 2025, including plug-in hybrid cars.