China’s auto sector has meaningfully slowed over the last year, with semiconductor shortages and COVID-related restrictions on travel impacting output and sales. As chip supplies have incrementally recovered, the outlook for the sector looks brighter in 2022, with the industry likely to play a role in stabilizing China’s economic growth later this year. Improvements in product delivery along with continued strength in new energy vehicles (NEVs) and exports will boost sales and output data relative to depressed 2021 levels. However, weakness in commercial vehicle demand could persist this year due to slower property and infrastructure construction.
