Another surge in Chinese car sales in month of March and the first quarter help confirm the strength of Chinese production and consumer demand ahead of the release of the latest GDP this Friday.
Inflation figures last week indicated the rebound in manufacturing price pressures and in some areas of consumer activity and now another solid monthly vehicle sales number provides the best evidence so far of the strength of Chinese consumer demand in 2021.
Economists will be looking for more evidence of this in today’s trade figures for March (Tuesday) and the first quarter and the industrial production, retail sales, investment and bank lending figures as well. Along with the March quarter GDP figures on Friday that will end the data dump for March and the first quarter.
Economists say that while the headline growth recovery from a year ago will be strong – a figure of 18% year on year for the rebound in GDP has been mentioned in many forecasts, the real story will be the quarter-on-quarter rise from the three months to December which will tell a story of a much slower rate of expansion.
Still, Friday’s car sales data for March and the quarter showed a strong recovery from a year ago. The figures showed Chinese car sales surged in March for the 12th consecutive month, as the world’s biggest car market moved further away from the depths of the COVID-19 pandemic a year ago.
The China Association of Automobile Manufacturers (CAAM) said sales reached 2.53 million vehicles in March, up 74.9% year-on-year. But that was only 10,000 more than the 2.52 million units sold in the first quarter of 2019 and was down from the first quarter of 2018.
That saw total car sales reach 6.48 million in the three months to March, soaring 75.6% from the Covid-depressed March, 2020 quarter figure of 3.7 million but better than the 5.3 million in 2019 (when car sales were in the midst of a sharp decline).
Passenger vehicle sales reached 1.87 million last month up 77.4% from a year earlier. Over 5.07 million passenger vehicles were sold in the first quarter of this year, up 75.1% in comparison to the same period last year.
New energy vehicles (NEV) also showed positive growth in both production and sales, which recorded 216,000 and 226,000 units in March, respectively, both expanding more than twofold over last year.
The March quarter saw NEV sales and production both exceeded 500,000 units. About 533,000 units of NEV were produced, while 515,000 units were sold, increasing 3.2 and 2.8 times, respectively, compared the first quarter of 2020.
NEV sales figures are the statistics to watch this year because they are outgrowing the overall market. It was only two years ago that Chinese authorities were trying to discourage NEV sales because of the looming surge in spending on subsidies for buyers.
That all seems to have been overturned since COVID.
