(Yicai Global) Dec. 9 -- Retail sales of passenger cars in China next year are likely to be the same as this year, if the government does not continue with policies to support the nation’s auto market, according to the China Passenger Car Association.

The CPCA expects 20.6 million vehicles to be sold in 2023, it said in a report released yesterday. The industry group also foresees the government extending the purchase tax cut, slated to expire on Dec. 31, to next June or even next December to underpin the market. 

With the cut in purchase tax and subsidies on new energy vehicles set to end this month, the CPCA predicted a surge in buying in December that will peak before the Spring Festival next month.

After the purchase tax on fuel vehicles was halved this June, sales jumped by 1.4 million units, the CPCA said. To boost consumer confidence among low- and middle-income first-time buyers, the policy needs to give greater weight to energy-saving cars among fuel vehicles and seek a balance between economy and environmental protection, it added.

Should government support continue into 2023, the wholesale volume of new energy passenger vehicles is expected to jump 30 percent to 8.4 million, with that of fuel cars likely to fall 10 percent to 15.1 million, the CPCA said, following this year’s drop in sales of fuel vehicles and growth in NEV sales.

The chip shortage that disrupted the global auto market in the past two years has been resolved, with prices declining and tight supply easing, the CPCA noted.

China’s passenger car exports surged 54 percent to 250,000 last month from a year earlier, but external demand for Chinese autos will weaken next year, the CPCA pointed out. New energy passenger cars accounted for 33 percent, or 82,000, of all those exported in November.

Sales of passenger cars fell 9.2 percent to over 1.6 million units last month from a year ago, CPCA data showed, while retail sales of fuel vehicles dropped 27 percent to nearly 1.1 million, with new energy vehicle sales up 58 percent to 598,000.

Editor: Futura Costaglione