Falling sales in May, triggered by chip shortages, deepened last month in China's vehicle market. But the country's leading industry association expects whole-year sales to beat its year-start expectations to grow 6.7 percent year-on-year to reach 27 million units.

Just 2.01 million vehicles were sold in June in the world's largest vehicle market, down 12.4 percent year-on-year, according to statistics the China Association of Automobile Manufacturers released on Friday.

Passenger sales including sedans, SUVs and MPVs in the month were down 11.1 percent from the same month last year.

Chen Shihua, deputy secretary-general of the association, said the major culprit was the lingering chip shortages throughout the global auto industry.

"Without chip shortages, our passenger sales could have returned to the level of 2019," Chen said.

Sales in the first half of the year tallied more than 10 million units, down 1.4 percent from the same period in 2019 but still up 27 percent from the first half of last year.

Overall sales in the first half, especially those of new energy vehicles, are prompting the association to revise its estimate of vehicle sales to 27 million units. This would be up 6.7 percent from 2020.It had predicted a 4 percent rise at the beginning of the year.

A total of 12.89 million passenger vehicles as well as trucks and buses were sold from January to June, up 25.6 percent year-on-year, according to the association's statistics.

More than 1.2 million electric cars and plug-in hybrids were sold in the first half, up over 200 percent year-on-year and accounting for 9.4 percent of total new car sales in the period.

Vehicle makers delivered differing performances in the first half. China's largest carmaker SAIC Motor, which is a partner of Volkswagen and GM, said its first-half production was cut by half a million units because of chip shortages.

But Chen Hong, chairman of the Shanghai-based State-owned carmaker, said the situation will turn for the better starting from the third quarter. The company would not scale down its yearly target of 6.8 million units, he added.

Japanese automakers, Honda Motor and Nissan Motor, saw their sales in China tumble in June as overall sales declined.

Honda sold 118,168 cars in China in June, down 17 percent from a year earlier. Nissan said in a statement that it sold 114,605 vehicles in China last month, down 16.3 percent.

Great Wall Motors, China's largest pickup and SUV maker, sold 100,664 vehicles in June, up 22.7 percent from the same month last year, according to statistics the company released on Thursday.

Its sales in the first half of the year totaled 618,211 units, surging 56.5 percent year-on-year, said the carmaker headquartered in Baoding, Hebei province.

BMW Group continued its strong performance in China, delivering 467,064 units in the first half, up 41.9 percent year-on-year.

Mercedes-Benz was the second-most popular premium carmaker. It sold 441,579 units in the same period, up 27.6 percent.

Ford suffered from semiconductor shortages, with its sales in the second quarter falling 3.6 percent. But its first-half deliveries, 306,700 units, were up 24 percent year-on-year.

Its premium arm, Lincoln, saw its best-ever first-half results, with sales hitting 42,200 units, up 111.4 percent from the same period last year.

"In the second quarter, we revealed six new vehicles and outlined a strong and innovative electrification strategy," said Anning Chen, president and CEO of Ford China.

"These actions－combined with our commitment to deliver always-on customer experiences－position us for success in the competitive Chinese auto market," Chen said.

General Motors, which only reports quarterly China sales, said it sold more than 750,000 vehicles in the second quarter this year, up 5.2 percent from the same period last year.

China's leading NEV manufacturer, BYD, saw its sales of electric vehicles and plug-in hybrids surge more than 192 percent year-on-year to 41,366 units in June. In the first half, BYD sold 154,579 units, up 154.76 percent year-on-year.

Chinese electric car startup Nio delivered 8,083 vehicles last month, a monthly record that represents a robust 116.1 percent year-on-year growth. The startup delivered 21,896 vehicles in the second quarter this year, another record representing an increase of 111.9 percent year-on-year.

Xu Haidong, vice-chief engineer of the CAAM, said NEV sales in the first half beat the association's expectations. "Their sales this year would hit 2.4 million, up from our previous estimate of 1.8 million," he said.