China’s passenger vehicle sales returned to growth in August year-on-year, as deeper discounts and tax breaks for environmentally friendly and electric vehicles boosted consumer sentiment even as economic growth remains weak.
Car sales jumped 2.2% in August from the same month a year ago to 1.94 million units, data from the China Passenger Car Association (CPCA) showed on Friday, the first year-on-year gain since May.
Sales rose 8.5% from July. For the first eight months, sales were up 1.8% at 13.38 million units.
Buoyed by hefty discounts, Tesla’s share of China’s electric vehicle (EV) market almost doubled in August to 13.2 percent from 7.5 percent in July, according to Reuters calculations based on the CPCA data.
Tesla (TSLA.O) sold 64,694 cars in China in August, the data showed, while deliveries of its China-made Model Y hit 65,316 last month, topping the CPCA passenger vehicle model sales.
Lower rates on existing mortgages are likely to help revive the auto market, said CPCA Secretary General Cui Dongshu, even as slowing economic growth hits consumers’ pockets.
China’s major banks will start to lower interest rates on existing loans for first-home purchases, one of a series of measures aimed at boosting the economy and the key debt-riddled property sector.