By Yoko Kubota

BEIJING--China's car sales fell for a third consecutive year in 2020, as the slump in the early months of the year during the height of the coronavirus pandemic overshadowed the strong recovery since July.

Full-year sales in the world's largest auto market fell 6.8%, the China Passenger Car Association said Monday. The decline in 2020 was less steep than the 7.4% drop in 2019.

In December, passenger-car sales rose 6.6% from a year earlier to 2.3 million vehicles, the association said.

Toyota Motor Corp.'s China sales grew 11% in 2020 from a year earlier, while those of General Motors Co. dropped 6.2%, the auto makers have said.

"This year will see a much stronger growth," said Cui Dongshu, secretary-general of the CPCA. The group forecast last month that Chinese car sales would rise 7% in 2021.

Demand for electric cars, especially from individual buyers rather than fleet buyers, continued to shore up the market. Sales of the so-called new-energy vehicles, a category that includes electric cars, surged by 58.1% last month to 206,000 vehicles, the industry group said.

Tesla Inc. helped drive the demand for electric cars. It sold 23,804 Shanghai-made Model 3 sedans last month, a 10% rise from November, CPCA data showed. The Palo Alto, Calif.-based EV maker sold more than 138,000 domestically made Model 3s in China last year. Earlier this month, Tesla cut the price of Model Y sport-utility vehicles by 30% in China. Previously imported, Tesla is set to start delivering Shanghai-made Model Ys later this month.

In an effort to combat pollution and revive the economy, Beijing wants new-energy vehicles to make up 20% of new-car sales by 2025, up from 5% in 2020.

A government-led sales promotion aimed at rural electric-car buyers that was launched in July contributed to robust sales, but sales could weaken as subsidies on electric-car purchases are set to be cut by 20% this year and be phased out by 2022.

Raffaele Huang contributed to this article.

Write to Yoko Kubota at yoko.kubota@wsj.com

(END) Dow Jones Newswires

01-11-21 0638ET