Automobile deliveries in China soared 26% Y/Y to 1.6M units in July, according to the China Passenger Car Association. The pace of sales was the highest in over 40 months, although it came against a weak comparable from a year ago.
Car deliveries in China are up 11% since the government lowered the tax on small vehicles to 5%.
Demand for SUVs and crossovers remained strong, with deliveries up 47% to over 580K. Domestic automakers posted strong growth during the month, led by Guangzho Automobile (+37%), Geely Automobile Holdings (+72%), and Great Wall Motors (+49%).
EV watch: A new proposal in China aims to boost EV sales by forcing automakers to produce more electric cars or purchase carbon credit offsets from peers. If Beijing grants final approval, the new rules will replace direct subsidies that are set to expire by 2020.
On the production front, LeEco announced plans this week for a $1.8B plant in China capable of producing 400K electric vehicles a year. The online video giant is also a backer of Faraday Futures, the somewhat mysterious EV startup out of California. In Japan, execs with Toyota and Nissan continue to drop hints on a strategy to focus on cheaper EVs.