A view of BYD new-energy vehicle in the Shanghai Auto Show in April Photo: Zhang Hongpei/GT

The introduction of a new purchase tax policy on July 1 may be a positive factor that will shore up automotive production and sales in the second half of the year, the China Association of Automobile Manufacturers (CAAM) said on Wednesday.

Car production and sales were both lackluster and fell short of expectations in the first half of the year, the CAAM said in a report posted on its website, as it called for consumption-boosting policies.

Passenger car production and sales continued to contract in June. 

The nation saw 1.60 million units produced, down 17.2 percent from last June and 1.73 million units sold, down by 7.8 percent.

For the first six months, passenger car production was 9.98 million units, down 15.8 percent compared with the same period last year, and sales were down 14 percent to 10.13 million units. 

However, the decline narrowed compared with the January-May period.

June was the 12th consecutive month to show a year-on-year decline for automotive production and sales. 

The phasing out of subsidies for new-energy vehicles (NEVs) on June 25 pushed some consumers to purchase and this helped prop up June sales, the CAAM report said. Production of NEVs grew by 56.3 percent to 134,000 units in June while sales shot up 80 percent to 152,000 units. 

Domestic brands’ market share slid 3.9 percentage points to 39.5 percent of total passenger vehicle sales in the first six months.