BEIJING/SHANGHAI (Reuters) -China on Thursday announced a nationwide campaign to promote automobile purchases in a major push to shore up demand in the world's largest auto market.
The announcement from the Ministry of Commerce came shortly after data showed passenger vehicle sales in China rose 7.3% in May from April, higher on the month but far from the robust recovery policymakers are hoping for.
The commerce ministry said it would coordinate and push local authorities to roll out targeted policies and measures in favour of car consumption. Financial institutions will be encouraged to introduce measures to boost lending for auto purchases, it said.
The campaign will target multiple car sales categories including both new and secondhand vehicles, it added, and push to replace gasoline cars with new energy vehicles (NEVs) such as battery-driven cars and plug-in petrol-electric hybrids.
It did not specify how much funding it would provide for the scheme.
The move marks the latest measure by authorities to boost spending on big-ticket items, which have bucked a tepid rebound in overall consumption after China abruptly ended COVID-19 containment measures late last year.
The government plans to extend and optimise tax incentives for NEV purchases and looks at ways to promote their development, state media reported on Friday. Officials in May also announced measures to promote rural NEV purchases.
PRICE CUTS, NEW PRODUCTS
The China Passenger Car Association (CPCA) said on Thursday said passenger vehicle sales in China totalled 1.76 million vehicles in May. For January-May, sales were up 4% year-on-year at 7.74 million cars.
Cui Dongshu, the association's secretary general, said sales had been helped by heavy price cuts by automakers, though the discounting was slowing.
More than 40 brands have cut prices in China since January after an initial move by Tesla (NASDAQ:TSLA) in a fight for market share as car demand slumped, with the ripples spreading through the wider industry.
The roll-out of a raft of new products and low-priced new models had also helped to support sales, he added. Sales of NEVs rose 10.5% in May from April and accounted for 32.9% of total May sales, CPCA data showed.
Tesla sold 77,695 China-made vehicles in May, CPCA data showed earlier in the week. The industry body did not offer a breakdown of export data by auto brands.