New energy vehicle (NEV) sales in China surged 26% on year to 109,000 units in August for their second consecutive month of gain, a promising sign for automakers that have invested heavily in the world’s biggest market for electric vehicles (EVs).

For the full year, NEV sales are likely to reach 1.1 million vehicles, down around 11% from last year, said the China Association of Automobile Manufacturers (CAAM) on Thursday.

NEVs include battery-powered electric, plug-in gasoline-electric hybrid and hydrogen fuel-cell vehicles.

“The sales rebound was fuelled by rural NEV sales promotion events and local governments’ support,” said senior CAAM official Chen Shihua.

EV makers from home-grown Nio and Xpeng to US leader Tesla are expanding manufacturing capacity in China where the government heavily promotes greener vehicles as a means of reducing chronic air pollution.

“There was a new-car effect in August, as a new mini EV model from GM’s local venture and Tesla’s Model 3 both sold well,” said senior LMC Automotive analyst Alan Kang. “Sales at EV startups like Nio and Xpeng were stable too.”

NEV sales in coming months will be around same as in August, Kang said.

China’s overall auto sales in August rose 11.6% to 2.19 million vehicles from the same month a year earlier, the fifth consecutive month of gain as China comes off lows hit during the coronavirus lockdown in the first few months of the year.

Sales are still down 9.7% for the first eight months of the year at 14.55 million vehicles, CAAM said.

Sales of trucks and other commercial vehicles, which constitute around a quarter of the market, surged 41.6%, driven by government investment in infrastructure and as buyers upgraded to comply with tougher emissions rules.

Sales of passenger vehicles rose 6%.

Automakers that reported sales growth in August include Geely Automobile Holdings and Toyota Motor Corporation. The main local joint ventures of Nissan Motor and General Motors, however, saw sales slide last month.

China’s auto sales in August rose 11.6% from a year earlier, the fifth consecutive month of gain, as the world’s biggest vehicle market comes off lows hit during the coronavirus lockdown.

Sales rose to 2.19 million vehicles last month, showed data from the China Association of Automobile Manufacturers. Overall sales are still down 9.7% for the first eight months of the year at 14.55 million vehicles.

Sales of trucks and other commercial vehicles, which constitute around a quarter of the market, surged 41.6%, driven by government investment in infrastructure and as buyers upgraded to new vehicles to comply with tough emissions rules.

Sales of passenger vehicles rose 6%. Automakers that have reported sales growth in August include Geely Automobile Holdings and Toyota Motor. General Motors’ local ventures, however, saw their sales slide last month.

Meanwhile, China’s International Aviation and Aerospace Exhibition, the country’s biggest airshow, will go ahead in November, the organiser said on Wednesday, backtracking on an earlier announcement the 2020 event had been cancelled due to COVID-19.

“As of now, China’s 13th Zhuhai Airshow will still be held as scheduled. If there is any change, please refer to the official news and website,” a spokesman said in a second statement.

An email from the spokesman earlier on Wednesday had said that the airshow, scheduled for November, had been cancelled due to the coronavirus pandemic, and the next one will take place in 2022. He later said that statement was based on his own “prediction”.

The biennial event usually draws key suppliers - such as Airbus SE, Boeing Co and Commercial Aircraft Corp of China (COMAC) - and has traditionally been used by Beijing to show off its growing aviation capability, such as military fighters and drones.

The announcements come as foreign nationals are largely barred from entering China due to concerns about importing coronavirus cases and severe restrictions on international flights.

This year’s largest aerospace expo, Britain’s Farnborough Airshow, was cancelled because of travel curbs and an industry downturn resulting from the pandemic.

The Zhuhai airshow’s organisers declined further comment on the reasons for the change in decision when contacted by Reuters.

China’s domestic aviation industry has been recovering and is now running at more than 90% of pre-pandemic capacity levels, according to data firm OAG, but that has yet to translate into a return to profitability for Chinese airlines.

As the global industry reels from the devastating impact of the pandemic, many Western aerospace companies have reduced budgets and some are not planning to attend the Zhuhai Airshow if it goes ahead, company sources told Reuters.

Progress on some key civilian aircraft programmes including COMAC’s narrowbody jet C919 and widebody CR929, jointly developed with Russia, has also been slow amid rising geopolitical tensions.

Separately, China shares shed early gains to end lower on Thursday, as more than 300 start-ups slumped earlier in the session after regulators moved to curb speculation on the tech-heavy ChiNext board.

Shares in China’s start-up firms plunged as investors retreated after a few stocks were suspended from trading due to “abnormal volatility” amid reports of government measures to crack down on speculation.

Reuters