China's car market sees V-shaped rebound on policy boost: Fitch

People visit the exhibition area of BYD, China's new energy vehicle (NEV) manufacturer, during the 19th China (Changchun) International Automobile Expo in Changchun, capital of northeast China's Jilin Province, July 15, 2022. Photo by Zhang Nan, Xinhua

China's passenger vehicle market saw a sharp recovery in June, buoyed by the country's robust consumer stimulus packages, according to a report from Fitch Ratings.

"The strong recovery is likely to continue into the third quarter of 2022 from a subdued level a year ago due to severe microchip shortages," the report stated.

Last month, wholesale deliveries of passenger vehicles soared by 42 percent year on year, while retail sales rose by 22 percent from a year ago, partly due to some delayed orders from May and front-loaded demand from July, the report said.

China's passenger vehicle exports continued to grow robustly by 40 percent year on year in the second quarter of 2022, as a result of strong overseas demand for electric vehicles and supply bottlenecks in other regions.

Despite a slowdown in April and May amid production halts and supply-chain bottlenecks, deliveries of electric vehicles doubled from a year ago in the second quarter, accounting for over 26 percent of that for passenger vehicles.

Official data showed that June's new energy vehicle sales hit a record high of 596,000 units, jumping 1.3 times from the same month of last year.