(Yicai Global) Dec. 8 -- China's auto market, the world’s largest, will post a 7 percent annual gain in retail sales next year, building on a strong rebound in the second half of this year, the China Passenger Car Association said today.

The market’s recovery has been V-shaped this year after first-half sales were hit by the pandemic, the association said. Sales of passenger cars -- sedans, multipurpose vehicles and sport utility vehicles -- will fall 7 percent this year from last, it added.

The market will get a boost from a gradual recovery in overseas demand and an expected rise in new-energy vehicle sales to 1.13 million units, the CPCA said. Premium Tesla models and micro electric vehicles from SGMV, a joint venture between SAIC Motor, Liuzhou Wuling Motors and GM China, will lead the gains.

Cutting costs will remain the key to narrowing the gap between fuel-driven vehicles and NEVs, said CPCA Secretary General Cui Dongshu.

In November, passenger car sales rose for a fifth straight month, jumping 8 percent to 2.1 million. Between January and November, they fell 8.3 percent to 17.3 million. Luxury vehicle sales rose 27 percent last month, with sales of high-end Chinese models from marques such as Hongqi and Chang’an advancing 9 percent.

Wholesale sales of NEVs soared 129 percent to 180,000 last month, with SGMV selling 36,070, BYD 26,015 and Tesla 21,604.

The peak winter sales period started this month, and China’s auto brands are likely to be the main beneficiaries, the CPCA said.

Cui also said the possibility of chip component shortages is unlikely to slow auto production, based on the experience of the information technology sector.