China’s passenger car sales jumped 55.5% in April, driven by robust demand, according to the China Passenger Car Association (CPCA). This surge in sales was fueled by the easing of COVID-19 restrictions and strong consumer confidence in the world’s second-largest economy.
Luxury vehicle sales also saw a significant uptick in April, reaching 240,000 units, an increase of 101% year-on-year. However, despite the strong monthly performance, passenger car sales for the first four months of the year were 5.9 million units, down 1.3% from the same period in 2022.
China’s gross domestic product (GDP) grew by 4.5% in the first quarter of 2023, surpassing analysts’ expectations of 4.0%, due to the government’s decision to abandon its zero-COVID policy and opening up of the economy.
China has set its economic growth target for 2023 at around 5%, following the country’s slowest pace of growth in nearly 50 years in 2022. In an effort to support this target, The People’s Bank of China cut the reserve ratio of commercial banks (RRR) in mid-March, the first cut of the year, to increase liquidity in the banking system and reduce the cost of funding for the business sector, as well as stimulating economic recovery.