In July, China produced 2.2 million passenger and commercial vehicles, down 5.3 percent month-on-month.

A total of 2.11 million were sold in July, down 8.2 percent month-on-month. However, the figures were up 21.9 percent and 16.4 percent respectively year-on-year, according to the CAAM.

A total of 1.73 million passenger vehicles were produced with 1.67 million sold in July.

The figures were down 3.9 percent and 5.6 percent respectively month-on-month but up 13.2 percent and 8.5 percent year-on-year.

A total of 472,000 commercial vehicles were produced in July, with 447,000 sold. This was down 10.4 percent and 16.6 percent respectively month-on-month but up 70.3 percent and 59.4 percent year-on-year.

From January to July, China produced 12.31 million vehicles and sold 12.37 million.

It marked a decrease of 11.8 percent and 12.7 percent respectively from the same period of 2019.

There were positive signs for new energy vehicles in July with 98,000 sold, up 19.3 percent from the previous year, the first increase of 2020.

In the first seven months, China produced 496,000 NEVs and sold 486,000, down 31.7 percent and 32.8 percent respectively year-on-year.

With the scaling back of government subsidies for NEVs since the second half of 2019, there has been a sales decline that has lasted for around a year, according to Xu.

"After nearly a year of strategic adjustment, new energy vehicle companies are on the right track and individual consumption is dominating the NEV market. These are key factors to ensure the steady development of the market," Xu said.

"We estimate total NEV sales will reach 1 million units this year in China, excluding the sales of Tesla."