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China auto sales growth seen for second straight month, boosting recovery hopes

Newly manufactured cars are seen at a port in Dalian

BEIJING (Reuters) - China's vehicle sales are estimated to rise 11.7% on year in May, its top auto industry body said on Tuesday, cementing hopes of a recovery in the world's biggest auto market with the first back to back monthly sales increase in about two years.

The China Association of Automobile Manufacturers (CAAM), in a post on its official WeChat account, said vehicle sales were estimated to rise to 2.14 million in May. It said the numbers were based on sales data it had collected from key companies, without giving further details.

CAAM expects January to May auto sales in China to fall 23.1% year on year to 7.9 million units.

As the global auto industry is hit hard by the coronavirus pandemic, China has become a ray of hope for automakers including Volkswagen <VOWG_p.DE> and General Motors <GM.N>.

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In April, China's auto sales hit 2.07 million units, up 4.4% from a year earlier, the first monthly sales growth in almost two years, CAAM data showed.

It cautioned last month that even if China contains the outbreak effectively, its auto sales are expected to drop 15% this year, from over 25 million vehicles in 2019. If the pandemic continues, the annual sales contraction will likely be by up to 25%.

(Reporting by Yilei Sun and Brenda Goh; Editing by Jason Neely and Muralikumar Anantharaman)