New-vehicle sales shrink for third straight month in China amid persistant chip crunch

China’s new-vehicle market contracted for the third consecutive month in July as tight microchip supplies continued to constrain vehicle output.

Last month, sales of new vehicles industrywide declined 16 percent year-on-year to 1.86 million, the China Association of Automobile Manufacturers said Wednesday.

In the month, deliveries of new light vehicles comprising sedans, crossovers, SUVs, multipurpose vehicles and minibuses dropped 7 percent to 1.55 million.

On July 1, China upgraded emission requirements on diesel vehicles to the State 6 standards, which are equivalent to the Euro 6 rules.

Chip shortages, coupled with tightened emission control, dragged down sales of new commercial vehicles such as buses and trucks down 30 percent to some 312,000 units, the trade group noted.

Thanks to the 77 percent rebound in the first quarter from the new coronavirus-stricken same period of 2020, new vehicle sales industrywide year-to-date advanced 19 percent from 2020 to nearly 14.8 million units in the first seven months.

The tally includes around 11.6 million light vehicles and 3.2 million commercial vehicles, an increase of 21 percent and 13 percent from a year earlier, respectively.

Electrified vehicles

In stark contrast to the overall new-vehicle market, EV sales remained explosive, soaring 164 percent to top 270,000 in July.

The July tally includes some 220,000 full EVs and 50,000 plug-in hybrids, surging 170 percent and 160 percent respectively.

For the first seven months, sales of new EVs rose 197 percent to roughly 1.48 million.

The number includes about 1.23 million EVs and 250,000 plug-in hybrids, a jump of 220 percent and 130 percent from a year earlier respectively.