MNI BRIEF: China Stimulates Car Sales To Boost Consumption

China will kick off a fresh promotional drive for new energy vehicles in rural areas, which will be followed by a push on home appliances and green building materials, all looking to boost spending on big-ticket items and help stabilize the economy, Vice Minister of Industry and Information Technology Xu Xiaolan told a press briefing Tuesday.

Both Shanghai and Shenzhen have increased the number of new vehicle licenses, while other provinces have also introduced car purchase subsidies, encouraging the replacement of old cars, said Sheng Qiuping, Vice Minister of Commerce.

Car sales fell 31.6% y/y in April amid sporadic Covid-19 outbreaks and chip shortages, dragging down overall retail sales by 2.7 percentage points, said Sheng. So far, China’s car ownership has reached 307 million, surpassing the U.S. to rank first in the world, Sheng added.