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Automobiles

China's auto market survives 2020 with just 2% dent

Japanese automakers among biggest winners, with Honda logging record sales

The Auto China 2020 show in September: Monthly Chinese vehicles sales were up for most of the year.   © Reuters

BEIJING/GUANGZHOU -- The Chinese automobile market shrank by only 1.9% last year, with economic stimulus softening the blow of the coronavirus, according to industry estimates released Wednesday.

About 25.3 million new vehicles were sold in 2020 in the world's largest auto market, led by trucks, according to preliminary numbers from the China Association of Automobile Manufacturers.

This marks the third straight annual decline, but sales have beaten year-earlier numbers for nine straight months through December, the estimates show.

Japanese automakers were among the biggest winners in China's post-COVID recovery. Honda Motor notched its second consecutive annual sales record, and Toyota Motor hummed along at double-digit growth for most of the year.

The auto association predicts that China's vehicle sales will grow for the first time in four years in 2021. The outlook anticipates 26.3 million vehicles sold that year, with passenger vehicles accounting for 21.7 million and commercial vehicles contributing 4.6 million.

The market in 2020 was underpinned by an 18% gain in sales of commercial vehicles, which would mark a new record.

After China contained the coronavirus outbreak, automotive plants quickly restarted production from April. On top of that, the government boosted infrastructure projects, which drove up demand for trucks.

Meanwhile, sales of passenger vehicle, which account for about 80% of the total, dropped 6.1% in 2020. Those purchases plunged in February and March, then started exceeding year-earlier numbers in May.

The turnaround is credited to subsidies extended by local governments to car buyers, among other measures to rev up demand. The easing of number plate quotas, which were put in place in large cities to reduce congestion, also played a role.

Honda reported that its Chinese auto sales climbed 4.7% last year to more than 1.62 million vehicles.

The year started inauspiciously for the automaker when China imposed a lockdown in late January on the city of Wuhan, the epicenter of the epidemic and the location of Honda's main assembly plant.

During the two-month lockdown, some Honda dealers complained of a lack of inventories. The recovery in demand later that spring reversed Honda's fortunes, and the company logged year-on-year gains every month since July.

The Accord, the CR-V and the Civic each sold more than 200,000 units throughout the year, driving up overall numbers. The company sold 201,499 hybrid vehicles, up roughly 70% from 2019.

Sales in December alone surged 46.2% on the year to 208,848 autos, marking a new single-month record. Honda has not released a sales goal for this year.

Toyota's sales in China grew 10% between January and November compared to the year-earlier period.

For December, China's overall vehicle sales rose by an estimated 5.4% on the year to 2.8 million vehicles, according to the automakers association. Passenger vehicle sales grew by 5.9%, but commercial vehicles fell 4.4%, which would represent the first drop for that category in nine months.

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