SHANGHAI/BEIJING (Reuters) — China’s auto sales rose at their slowest pace in five months in October, from a weak base a year ago, as zero-COVID policies kept consumers away from showrooms and weighed on sentiment, while the effect of incentives for buyers also waned.
The world’s biggest auto market posted sales of 2.51 million units in October, a 6.9% rise from the same month a year ago, according to data from the China Association of Automobile Manufacturers (CAAM) on Thursday. That represented a sharp slowdown from the 25.7% increase in September.
CAAM tracks broader auto wholesales from manufacturers to dealers, including passenger vehicles, buses and trucks.
Total auto sales rose 4.6% from the same period last year, CAAM data showed, up slightly from 4.4% in the first nine months of the year.
This time of year, known as “Golden September, Silver October,” is usually a high point in sales for the industry, with consumers making purchases after staying away from showrooms during the stifling summer months.
But automakers and investors are bracing for a downturn in the world’s largest car market due to a sputtering economy, despite government incentives in recent months to boost sales, such as tax cuts and subsidies.
In July, CAAM lowered its auto growth projection for 2022 to 3% from 5.4% previously.
Automakers in China delivered a record number of cars to dealers in the first nine months of the year even as retail demand slowed, setting up the market for a slowdown in 2023, analysts at China Merchants Bank International said last month.
“Although the trend is good with production and wholesales in the auto industry, the domestic retail market is weak and inventory level has improved,” said Chen Shihua, CAAM’s deputy secretary general, at an online conference.
The average daily retail sales of locally produced cars in China fell 2.4% in the first three weeks of October from a year ago, with Chinese brands outperforming their foreign counterparts, according to a CMBI report based on auto insurance data.
Sales of new energy vehicles — which include pure electric vehicles, plug-in hybrids and hydrogen fuel-cell vehicles — increased 81.7% in the month, the slowest pace in six months.
Tesla added to its electric vehicle inventory in Shanghai at its fastest pace ever in October, brokerage data showed recently.
BYD’s sales more than tripled thanks to a wider range of EV and hybrid offerings, while Nio also saw sales increase 174.3% in October due to the introduction of new models such as ET5.