(Yicai Global) March 8 -- China’s car sales jumped last month from a year earlier, according to new industry figures, after this year’s lunar new year holiday fell in January and despite the end of new energy vehicle subsidies.

Retail sales of passenger vehicles rose 10.4 percent to 1.39 million units in February, data released by the China Passenger Car Association showed today, while it tumbled almost 38 percent to 1.3 million in January.

BYD led the way with sales of 177,000 vehicles, up 12.5 percent, followed by FAW-Volkswagen Automotive with 111,000, a rise of 7.8 percent, and Chongqing Changan Automobile with 95,000, a gain of  6.7 percent. Other automakers such as Tesla China, GAC Toyota Motor, BMW Brilliance Automotive and Beijing Benz Automotive also saw sales jump.

NEV sales soared 61 percent to 439,000 last month, with the penetration rate up 10 percentage points to 31.6 percent, the CPCA data showed.

Passenger car exports reached 250,000, including 79,000 NEVs, 96 percent of which were all-electric vehicles. The CPCA said it expects NEV exports to reach one million this year.

Last year, China became the world’s second-biggest auto exporter after Japan with an annual increase of 55 percent to 3.4 million units, at an average price of USD18,000 each.

The CPCA said this month will be a golden period for post-holiday production and consumption, aided by China’s success in pandemic control and prevention. It added that further economic recovery this year will keep boosting demand.

But CPCA Secretary General Cui Dongshu sounded a note of caution, saying that the auto market is facing a difficult transitional period, with slowing sales of fossil fuel cars. To help support the sector, he suggested that the halving of fuel vehicle purchase tax implemented in the second half of last year should continue through the same period of 2023.

Cui also said it would be possible to gradually restore the NEV purchase tax at a rate of around 5 percent to ease pressures from reduced tax income, given that total vehicle purchase tax collected last year fell CNY90 billion (USD12.9 billion) to just CNY260 billion (USD37.3 billion).

Editor: Tom Litting