China’s auto sales in April and May exceeded expectations, Paul Gong, China auto analyst at UBS Investment Research, said on Thursday.
China’s vehicle sales should show an 11.7 percent rise year on year for May, according to data from the China Association of Automobile Manufacturers.
UBS said May’s growth indicates recovery to a greater extent in the overall auto market. It also noted that the COVID-19 pandemic had partially raised people’s desire to buy a vehicle.
The firm believes the industry may drop 10 percent year on year in the second quarter but overall auto sales could increase by 10 percent in the third quarter and 7 percent in the fourth.
The sales growth for April and May was much higher than predicted by UBS in March. In the next few months, UBS says the auto market will be in a relatively prosperous situation.
UBS interviewed 1,000 people in China during the first week of April, with 27 percent saying the pandemic had spurred their desire to buy a car even though around half of the households in the survey may already have a vehicle.
UBS said passenger car sales in April had returned to the level they were in the same period last year, while commercial vehicle sales were even better than passenger car sales.
Commercial vehicles have outperformed passenger cars in the past two months, including heavy-duty trucks an relatively light trucks and pickups. This is partly because of increased demand driven by investment in infrastructure, UBS said.