<article><p class="lead">China's car sales in May rose against a year earlier for the first time in almost two years, as demand revived following the removal of Covid-19 restrictions.</p><p>Sales promotions and government measures to boost consumption added to the pick-up in sales, along with the pent-up demand. </p><p>The recovery also got a boost from a lower base month in May 2019. Demand for new cars fell at that time ahead of the implementation of tighter fuel standards in some parts of China from the second half of 2019.</p><p>Total car sales in May rose by 7pc from a year earlier to 1.67mn, according to China's automotive manufacturers association. The last time sales rose was in June 2018. </p><p>The increase contrasted with a 27pc fall in car sales during January-May. The contraction reflected the impact of Covid-19 lockdown measures in China earlier in the year. </p><p>Chinese car production rose by 11pc in May to 1.66mn. </p><p>The pick-up in sales has eased pressure on car dealers' inventories. But the moves to boost sales in May are likely to exacerbate a seasonal slowdown in demand and pressure on inventories during the summer months, according to the China automobile dealers association. </p><p>The rise in car sales was also focused on certain types of vehicle. Demand for sports utility vehicles and cross-over vehicles rose strongly in May. Sales of sedan cars and multi-purpose vehicles fell. </p><p>Sales of environmentally-friendly cars dipped by 23pc in May to 82,000. Electric-vehicle car sales fell by 25pc to 64,000. Sales of plug-in hybrid vehicles fell by 16pc to 18,000. Total sales of all types of environmentally-friendly cars also fell by at least 35pc during January-May. </p><p>Demand for China-branded cars rose at a slower pace than total car sales, edging up by 0.4pc in May to 571,000. These cars accounted for 34.1pc of total car sales in May, down by 2.2 percentage points from the same month last year. </p><p class="bylines">By Jane Liu</p></article>
