| 1:17 PM EST

Car Sales Continue to Rebound in China

Two months of year-on-year gains might signal recovery from year-long slump.


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Retail demand for new cars in China just chalked up its second consecutive year-on-year gain.

On the road again in China.  (Getty Images)

Sales, which grew 8% in July, climbed 9% to 1.73 million passenger vehicles in August, the China Passenger Car Assn. reports. The trade group represents car dealers.

Happy Days Ahead?

Deliveries had plummeted nearly 80% in February as the coronavirus spread in China. But sales rapidly improved, posting a 2% gain in May before dipping in June. Last month’s gain was the market’s strongest in more than two years.

CPCA says the two-month upturn might signal the end of a slump in car sales that began in China two years ago. But it’s too soon to tell for sure.

Analysts caution that China’s car market remains fragile, thanks to escalating trade tensions with the U.S. and upward pressure on vehicle prices caused by tougher air pollution standards.

Outselling Tesla

Electric vehicles were an especially bright spot for the Chinese market.

Demand for EVs is showing signs of revival after a year-long skid that began when the government began to tighten its incentives program in mid-2019. But sales jumped 45% to 82,500 units in August, according to CPCA.

Tesla’s delivery of 11,800 Model 3 sedans in August ranked third behind EV sales by domestic producers SAIC and BYD.

The Chinese EV market’s best-selling model in August was the microscopic Hongguang Mini EV produced by the SAIC-General Motors-Wuling venture. The two-door city car, which debuted in July, has collected some 50,000 orders. Consumers scooped up 15,000 copies of the four-seater last month.

Measuring less than 10 feet long, the $4,200 Mini EV’s 27-hp motor and 13.8-kWh battery can propel the car 124 miles per charge and reach a top speed of 62 mph.

No Bellwether

Whether China’s car market can sustain a recovery isn’t certain. But its sales slump began more than a year ago. That means posting positive year-on-year results will be easier than for the American market, where demand was still strong a year ago.

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