(Yicai) Jan. 15 -- China’s vehicle sales will likely increase for the sixth straight year this year, supported by the country’s consumption promotion policies, but the growth rate is expected to be the lowest in the period, according to the China Association of Automobile Manufacturers.

Auto sales in China are expected to grow 1 percent to 34.8 million units this year from the previous year, the CAAM said yesterday. That compared with a 4 percent jump in 2021, 2 percent in 2022, 12 percent in 2023, 5 percent in 2024, and 9 percent last year.

Sales of passenger cars will likely climb 0.5 percent to 30.3 million units and of commercial autos 5 percent to 4.5 million units in 2026, the CAAM noted. New energy vehicle sales are expected to surge 15 percent to 19 million units, while auto exports may jump 4 percent to 7.4 million units.

China carried on with national subsidies for trading in consumer goods and renewing equipment for the third straight year in 2026, while the Ministry of Commerce and eight other government agencies recently jointly issued an action plan to promote green consumption, said Chen Shihua, deputy secretary-general of the CAAM, noting that these measures will stabilize market expectations and boost auto consumption.

Car sales in China declined from 2018 to 2020, impacted by the industry cycle, but have since continuously grown thanks to the rise of domestic NEV makers.

China’s vehicle production and sales rose to new record highs last year, topping 34.5 million units and 34.4 million units, respectively, while also leading the world for the 17th consecutive year, the CAAM announced. NEV sales soared 28 percent to 16.5 million units, while auto exports jumped 21 percent to 7.1 million units.

The Chinese auto industry withstood the external pressure from trade protectionism and the restructuring of the global supply chain last year, showing strong resilience and vitality, Chen noted. In particular, NEV sales continued to grow under the combined effect of favorable policies, abundant supply, and improved infrastructure, becoming the dominant force in the domestic car market, Chen pointed out.

On Jan. 1, China adjusted its 12-year NEV tax exemption policy, halving the purchase tax break to 5 percent from 10 percent, with the maximum exemption per vehicle set at CNY15,000 (USD2,150).

Retail sales of passenger vehicles in China plunged 32 percent to 328,000 units in the Jan. 1 to 11 period from a year earlier due to the policy change, with NEV sales dropping 38 percent to 117,000 units, according to data from the China Passenger Car Association.

Editors: Dou Shicong, Martin Kadiev