(CapitalWatch, Jan. 12, Hong Kong) China's car sales rose 3.8% year-over-year in 2021, the first year that the world's largest car market has seen growth since 2017.
The China Association of Automobile Manufacturers (CAAM) released data on Wednesday showing December's monthly sales of around 2.7 million brought total figures for the year to 26.28 million. Passenger vehicle sales rose 6.5% to 21.48 million units, while sales for commercial vehicles for 2021 fell 6.6% at just under 4.8 million.
Exports also rose for China-made vehicles overall, up 101.1% year-over-year in 2021. Although the market grew overall, December was the eighth consecutive month that CAAM reported declining sales.
This rise was in part attributed to the surging popularity of new energy vehicles (NEVs) in the country. Production of NEVs in China soared 159.5% compared to 2020, and sales jumped 157.5%. NEV sales in December alone jumped 114% from the same month of 2020 with 531,000 sold. NEV exports also boomed in 2021, up 304.6% compared to 2020.
Top EV maker Tesla Inc. (Nasdaq: TSLA) mirrored this sales growth, a 34% increase from November and almost three times that of sales in the same month of 2020, hitting its highest monthly rate for China-made car sales since the company started manufacturing in the country. Tesla's Gigafactory Shanghai produced 484,130 cars in 2021, a 235% increase from the previous year that makes up more than half of Tesla's global yearly deliveries. With green tech and renewable energy at the forefront of China's efforts to curb carbon emissions and combat climate change, 531,000 NEVs were sold, a 114% increase from 2020.
Starting in 2018, the Chinese car market has been facing domestic and global issues that dragged down market growth after years of an upward trajectory. The phasing out of tax cuts for automakers and the U.S.-China trade war put pressure on production and sales. Auto production worldwide has also been heavily impacted alongside most industries by the onset of the Covid-19 pandemic as well as the global shortage of semiconductors starting in 2020.
In 2022, CAAM projects automobile sales to rise 5.4% to 27.5 million; NEV sales are expected to surge 47% to 5 million.