UPDATE 3-Chinese auto recovery on track as vehicle sales rise for ninth month

(Updates with background)

BEIJING, Jan 13 (Reuters) - China’s vehicle sales rose for a ninth straight month on an annual basis in December as the country continued to lead a recovery in the global automobile industry from the COVID-19 pandemic, despite seeing sales falling for a third year in 2020.

Vehicle sales rose 6.4% in December from a year earlier to reach 2.83 million vehicles, data from the China Association of Automobile Manufacturers (CAAM) showed, slowing from a 12.6% increase in November.

China’s automobile industry was hard hit by the pandemic in early 2020 but started to bounce back in the second quarter, along with the rest of the economy, as the country managed to get the coronavirus largely under control. Automakers including Toyota and Great Wall Motor reported sales growth in China in 2020.

Full-year sales in the world’s biggest auto market fell 1.9% to 25.3 million vehicles in 2020, the data showed.

CAAM said last month it expects vehicle sales to rise by around 4% in 2021, but has warned a shortage of certain auto chips may start to have an impact on car production at some Chinese companies in the beginning of this year.


The data showed passenger vehicle sales fell 6% for the full year of 2020.

The sales of commercial vehicles, which constitute around a quarter of the overall market, surged 19% thanks to government investment in infrastructure and as buyers upgraded to comply with tougher emissions rules.

Sales of new energy vehicles (NEVs), including battery-powered electric vehicles, plug-in petrol-electric hybrids and hydrogen fuel-cell vehicles, increased 11% in 2020 to 1.37 million units.

NEV sales are expected to hit 1.8 million units this year, CAAM has also said.

NEV makers such as homegrown Nio Inc and Xpeng Inc as well as foreign groups, such as Tesla Inc, are expanding manufacturing capacity in China where the government has promoted greener vehicles to reduce air pollution.

Beijing wants NEVs to account for 20% of its overall auto sales by 2025, versus about 5% now.

China is the only major economy expected to have grown last year. The world’s second-largest economy is expected to have expanded 1.9% in 2020 and to grow 7.9% in 2021, the International Monetary Fund has said. (Reporting by Yilei Sun and Brenda Goh; Editing by Ana Nicolaci da Costa)