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China’s vehicle sales slid in July for a third consecutive month, hit hard by flooding in some areas of the country, COVID-19 outbreaks in other areas and the global shortage of semiconductors.
The world’s biggest auto market saw sales drop 11.9% from the same month a year earlier to 1.86 million vehicles, according to data from the China Association of Automobile Manufacturers (CAAM).
For the first seven months of the year, China’s vehicle sales have jumped 19% as the market recovered from pandemic lows. CAAM said that rebound is set to peter out with sales for the rest of 2021 expected to be below relatively high year-ago levels, although the market is still expected to log growth overall on an annual basis.
Chen Shihua, a senior CAAM executive, cautioned that the global chip shortage, which has led to automakers curtailing production, was unlikely to resolve itself soon as the pandemic rages on in many parts of the world.
The government’s promotion of greener vehicles to cut pollution has prompted electric car makers such as Nio Inc (NIO.N), Xpeng Inc (9868.HK) and BYD Co Ltd (002594.SZ) to expand manufacturing capacity in China.