More significantly, the stabilizing of economic development has become a top priority in national economic policy, which we expect will enhance car-purchasing sentiment.

The inventory situation has also improved recently.

The Chinese Automobile Dealers Association's inventory index decreased for the second month in June, indicating there is more room for sustainable growth for the rest of this year.

Possible car purchasing limits in some second-tier cities have emerged as one of the major risks for China's light vehicle market in the upcoming years. But they are a positive factor for car sales in the short term as widespread rumors likely push forward future purchases.

The writer is a senior market analyst at consultancy LMC Automotive, who can be contacted through bin.zhu@lmc-auto.com