'Promote initiatives to push retail up a gear'

China should continue and consolidate initiatives that helped spur vehicle sales last year, to further stimulate the sector that accounts for a big chunk of the country's economy, experts said.

Local authorities did a lot of work to promote car sales, with rewarding results, but short-term policy support could lead to fluctuations in the market, said Cui Dongshu, secretary-general of the China Passenger Vehicle Association.

He said the authorities should continue the initiatives to ensure the sector's stable and sustainable development.

At least four major cities including Beijing and Shanghai relaxed their limits and offered an extra 115,000 license plates combined in 2020.

A going-to-the country campaign for new energy vehicles kicked off in the second half of the year generated fruitful results as well.

By the end of 2020, more than 180,000 vehicles were sold thanks to the campaign, according to the China Association of Automobile Manufacturers.

Ye Shengji, a deputy secretary-general of the association, said around 30 carmakers joined the campaign last year, with models available numbering over 60.

In early February this year, the Ministry of Commerce called on local authorities to relax the limits and design campaigns considering local conditions to further boost the market, citing the examples of Beijing and other cities in 2020.

"Cars are the mainstay of the market of consumption," said the ministry. Statistics show that a total of 25.31 million cars were sold in 2020, worth 3.94 trillion yuan ($608.2 billion) in 2020, accounting for 10 percent of the country's total retail sales of consumer goods.

The ministry said the goal is to further unleash the potential of car consumption by relaxing limits on purchasing while strengthening management on car use.

"(We will) phase out administrative bans on car purchasing in an orderly way," said the ministry.

It also called for a continuation of the going-to-the countryside campaign and suggested local authorities to learn from Beijing and make new energy license plates more accessible to car-free families.

Starting from this year, 60 percent of its new energy vehicle license plate quotas are reserved for car-free families, and the percentage will grow further to 70 percent in 2022 and to 80 percent from 2023 onwards, according to the capital city's transport commission.

Late last year, an official at the Ministry of Industry and Information Technology said the new energy vehicle campaign in rural areas will definitely continue in 2021, and the details are being worked out.

Cui at the China Passenger Car Association said there is vast potential in China's vehicle market, as the number of vehicles per 1,000 people still lags far behind developed countries including the United States.

The China Association of Automobile Manufacturers estimates annual sales to reach 30 million in 2025.

Vehicles sales in the first month this year soared. The China Association of Automobile Manufacturers estimated that car sales in China would total 2.54 million for January, increasing 31.9 percent year-on-year.

The January figures continued the upward trend since April 2020 when car sales bounced back after the successful containment of COVID-19 in China and the recovery of the Chinese economy.