China’s auto sales grew to 2.8mn units in December up by 5.4pc from the prior year, according to data released by the China Association of Automobile Manufacturers. Sales of passenger vehicle in December rose by 5.9 pc, while commercial vehicles sales fell by 4.4pc.
The association predicts sales to slow in 2021 and grow by 4pc to 26.3mn units with robust sales of new energy or electric vehicles (EVs).
In 2020, China’s auto sales dropped by a mere 1.9pc from the prior year to around 25.27mn units, according to preliminary data. Sales were led by trucks. Total heavy truck sales in 2020 are estimated to be 1.62mn, up 38pc from a year ago. Despite disruptions caused by the COVID-19 pandemic, China’s auto industry ramped production and benefitted from a series of government policies that stimulated auto sales. December marked the ninth successive month of sales growth.
EV sales
Despite a decline in subsidies, the production and sales of electric vehicles are expected to increase in 2021. With the start of the New Year, Tesla has cut prices for Model Y vehicles. Domestic auto companies are still far behind in the competition, while Tesla is running at full capacity with three shifts. The commence of production at Tesla’s new plant in Shanghai with a further increase in production.
The annual production capacity of the Shanghai Super Factory for Model 3 is 250,000 vehicles, while the weekly output of the plant is 8,000 units, which totals 400,000 vehicles annually. On Jan 3, Tesla had revealed initial global output estimated for 2020 to be 509,700 vehicles.
Heavy truck sales
In 2020, heavy truck sales rose by 38pc from a year ago to 1.623mn units, according to initial industry estimates. In December, heavy truck market sales dropped by 16pc to 114,000 units from November but were up by 24pc from the prior December. Despite lower sales from November, sales in December were a new high for the month on a historical basis, for a cyclically low sales month. It also marks the ninth successive month of record sales since April.
China’s annual heavy truck sales are estimated to account for about 70pc of the global heavy truck sales in 2020.