China aims to restore auto demand with fiscal stimulus: Fitch

ANKARA

China aims to restore domestic auto demand with strong fiscal stimulus packages, the global ratings agency Fitch Ratings said on Monday.

The agency said in a statement that stimulus packages in the country are likely to help Chinese automakers increase their passenger-vehicle production and deliveries from June onwards.

"This may help wholesale deliveries return to mid-single-digit growth in 2022 despite the substantial volume losses during the latest COVID-19 outbreaks," it said.

Central and local governments in China have recently announced stimulus packages for the auto sector in order to increase domestic demand for passenger vehicles, such a tax cut to 5% from 10% in car purchases, which will be effective from June to December this year.

Electric vehicles, which provide a key growth for Chinese auto market, is also expected to benefit from new-energy vehicle subsidies and full redemption of the vehicle purchase tax, according to Fitch.

The agency, however, warned that Chinese automakers may need to build larger stocks for critical components, beware of cost inflation pressures and supply-demand mismatches in chips and batteries.

Chinese auto sector largely struggled during April this year due to the lockdowns driven by the omicron variant of the coronavirus, which halted operations and supply chains in the industry.

ANKARA

China aims to restore domestic auto demand with strong fiscal stimulus packages, the global ratings agency Fitch Ratings said on Monday.

The agency said in a statement that stimulus packages in the country are likely to help Chinese automakers increase their passenger-vehicle production and deliveries from June onwards.

"This may help wholesale deliveries return to mid-single-digit growth in 2022 despite the substantial volume losses during the latest COVID-19 outbreaks," it said.

The agency, however, warned that Chinese automakers may need to build larger stocks for critical components, beware of cost inflation pressures and supply-demand mismatches in chips and batteries.

Chinese auto sector largely struggled during April this year due to the lockdowns driven by the omicron variant of the coronavirus, which halted operations and supply chains in the industry.