Finally, some good news was coming out of the auto sector in China, with last year's sales growth for the first time since 2017. Data coming from the China Association of Automobile Manufacturers (CAAM) showed that a total of 26.28 million vehicles were sold in the country last year, a 3.8 percent increase compared to 2020, the year the COVID-19 pandemic first struck.
The final figures got a major boost in December as 2.79 million vehicles were sold in China during this period. That is 1.6 percent lower, though, compared to the number of vehicles sold in December 2020. It was the eighth consecutive monthly drop, heightening concerns that China's auto sales may drop again in 2022.
After years of outstanding growth, China's burgeoning car market hit a road bump in 2018 and started contracting. Factors such as the phasing out of tax cuts, the trade war between Beijing and Washington, and the COVID-19 pandemic contributed to the decreasing vehicle sales.
Just when it seemed the auto market would rebound by mid-2020, the global shortage of semiconductors happened. That forced automakers across the globe to either suspend or cut production with semiconductors, a vital component in the car's main parts, from entertainment systems to power steering.
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There was finally some light at the end of the tunnel in 2021, with new energy vehicles (NEVs) providing a major boost to the auto sector. Sales of NEVs grew 157.5 percent in 2021, with a total of 3.52 million units sold. The vehicles included in this classification were the plug-in petrol-electric hybrids, hydrogen fuel-cell vehicles, and battery-powered electric vehicles.
In December alone, a total of 531,000 new energy vehicles were sold in China, a 114% year-on-year increase. Demand for NEVs has been skyrocketing after the Chinese government promoted their usage as part of its efforts to lessen air pollution.
China has provided the infrastructure to support the NEV boom, with the country building 2.62 million charging piles, 75,000 charging stations, and 1,298 battery swapping stations by the end of 2021. This has made the public more open to acquiring NEVs, with its market share now at a solid 13.4 percent.
CAAM expects continued growth for NEVs in 2022, with sales likely increasing by 47 percent to 5 million. CAAM also expects vehicle sales to grow for the second consecutive year in 2022, with a 5.4 percent increase as a target. That would mean a total of 27.5 million units sold.
While China's EV market is rising, foreign automakers have struggled to gain a foothold on local consumers, with Tesla the only brand to rank in the top 10 in terms of smart cars that appeal. Tesla had a huge month of December, selling a record 70,847 China-made vehicles.
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