Despite facing lots of challenges, China's auto market will end three consecutive years of negative growth in 2021, with sales estimated to reach 26.1 million units with a growth rate of 3.1 percent year-on-year, a leading industry association said last week.

The China Association of Automobile Manufacturers also forecast that auto sales will reach 27.5 million units next year, up 5.4 percent year-on-year.

Passenger car sales are likely to reach 23 million units next year, up 8 percent year-on-year, and commercial vehicle sales are expected to be 4.5 million units, down 6 percent year-on-year.

The association adjusted its sales prediction for 2021 to 27 million in the middle of the year. Despite the good results, production fell short by 750,000 vehicles in the first 10 months due mainly to the global chip shortage, said Chen Shihua, deputy secretary-general of the association.

For the whole year, the chip shortage may decrease production by 1.3 million cars, Chen said.

There are many positive factors for the domestic car market, including policy support, strong overseas demand and surging new energy vehicle exports, CAAM said.

Chinese passenger car brands have performed well this year and have become the main force driving market growth.

In the first 11 months, there were 8.41 million Chinese-branded passenger cars sold, recording a growth rate of 25.1 percent year-on-year, and accounting for 44.1 percent of total passenger car sales. The figure increased 6.4 percentage points compared with the same period last year.

The passenger cars of German, Japanese and South Korean carmakers posted year-on-year declines.

The NEV sector has entered a new stage of explosive growth, CAAM noted.

Data from the association showed that in November the production and sales of NEVs reached 457,000 and 450,000 respectively, up 1.3 times and 1.2 times year-on-year. From January to November, China's NEV sales were 2.99 million units, up 166.8 percent year-on-year.

CAAM forecast that new energy vehicle sales are likely to reach 3.4 million units this year and 5 million units next year, with a growth rate of 47 percent year-on-year.

China Galaxy Securities reported that China's NEV sales are expected to be around 6.11 million units in 2022, with global sales nearing 12 million.