May was a very good month for automobile makers and distributors in China. Vehicle sales rose 16% in China year-on-year in May. The data from the industry showed that 1.61 million units were sold during the month of May, showing a strengthening and strong recovery for the world’s largest automobile market. While the sale of passenger vehicles had gone up 12.5% in April, they went up 22.6% in May to 1.28 billion, according to the figures from the China Association of Automobile Manufacturers.
In 2011, the auto sales in China had a dramatic downturn when the government pulled back some of its incentives and some cities slapped harder restrictions on car numbers to get rid of pollution and congestion. While auto sales had increased more than 32% in 2010, they increased by only 2.5% in 2011.
Now, a company like General Motors has a 21.3% surge in May, showing a record number of auto sales. State media has also reported that policymakers are thinking about reviving policies to subsidize the buying of smaller vehicles in rural areas. This will help to increase consumption and help with the economy.