Zhou Min, a car salesperson at an Audi 4S store in Nanning, capital of south China's Guangxi Zhuang Autonomous Region, handed over the key of an Audi Q4 to a buyer, marking his 16th sale of an Audi vehicle this year.

"We have had a promotional campaign recently. The cash discount for the Audi Q4 has been increased from 23,000 yuan (about 3,368 U.S. dollars) to 60,000 yuan," Zhou said.

Stimulated by preferential measures, such as giving discounts and offering gift packs, the Audi retail dealer has attracted more potential buyers coming for a closer look since the campaign launched at the beginning of March.

Due to some incentive policies in 2022, such as halving the car-purchase tax for passenger vehicles priced at no more than 300,000 yuan and with 2-liter engines or smaller, and purchase tax exemption for new energy vehicles (NEV), China's auto market maintained growth last year.

Data from the China Association of Automobile Manufacturers (CAAM) showed that the country's auto sales reached 26.86 million units last year, up 2.1 percent year on year. During the same period, the country's NEVs sales rose 93.4 percent to about 6.89 million units. The total production and sales volume of automobiles in China has ranked first in the world for 14 consecutive years, according to the CAAM.

However, affected by the epidemic and the termination of the car-purchase tax cut policy and the government subsidy program for NEVs at the end of last year, China's auto sales significantly declined in the first two months of this year, according to the CAAM.

The country's domestic demand has not yet been fully released. The steady growth of the Chinese automobile industry still needs relevant policies to boost it, said Chen Shihua, deputy secretary general of the CAAM.

The first quarter is usually a period of slack sales of vehicles. But with stimulus policies and measures, sales will gradually pick up, said a senior manager from SAIC-GM-Wuling (SGMW), a major Chinese automobile manufacturer based in Liuzhou in Guangxi.

To stimulate auto consumption, SGMW has cooperated with local commerce authorities to roll out various incentive policies, including providing government subsidies and consumption coupons to buyers to reduce their costs, according to sources with SGMW.

Auto enterprises and some local governments have launched a series of sales campaigns.

In central China's Hubei Province, the Dongfeng Motor Corporation launched a massive car sales promotional campaign in March. Buyers who purchase certain Dongfeng Motor models can enjoy a 90,000 yuan cut in price with subsidies offered by the local authorities and the company, according to Dongfeng Motor.

Thanks to the continuous provision and implementation of suitable local policies, including offering financial subsidies and coupons for consumers to support and encourage the development of the NEV industry and automobile consumption nationwide, sales of NEVs in China maintained a positive growth trend.

The production and sales of NEVs in the country reached 977,000 and 933,000 units in the first two months of 2023, up 18.1 percent and 20.8 percent year on year, respectively, the CAAM said.

In February, the recovery of the NEV market was notably on the rise. BYD, China's largest NEV manufacturer, said its NEV sales jumped 112.6 percent to 193,655 units.

Looking at startup carmakers, NIO delivered 12,157 NEVs in February, up 98.3 percent from 2022. Li Auto delivered 16,620 units during the same period, up 97.5 percent.

"We are optimistic about the annual sales growth," said Li Bin, founder of NIO, noting that the company's overall sales have improved significantly recently, and its market share in the high-end, pure electric market has continued to increase.

"The auto market did not have a good start in January. It is a reasonable trend in line with expectations," said Cui Dongshu, secretary general of the China Passenger Car Association.

Stabilizing and expanding auto consumption is a significant part of consumption promotion. The stimulus policies of the government and auto manufacturers to boost auto consumption will stimulate the auto market, Cui added.

"China's domestic auto market still has enormous potential, with economic growth and personal consumption gradually strengthening. I have confidence in the development of the auto market this year," Cui said.