China’s passenger-car sales showed signs of recovery from a historic rut as dealers offered discounts to clear inventory before new emissions rules kicked in.

Retail sales of sedans, sport utility vehicles, minivans and multipurpose vehicles rose 4.9% y/y to 1.8 million units in June, according to preliminary numbers from the China Passenger Car Association. That’s the first increase since May 2018.

The report offers some hope for automakers and dealers struggling with the first slump in demand in a generation, caused by slowing economic growth, rising trade tensions and stricter emissions rules. 

While the June data is “inspiring,” it’s inflated by discounting and it won’t be easy for the market to keep up the growth, Cui Dongshu, secretary general of PCA, told.

Dealers slashed prices by as much as 50% in recent weeks, according to local media reports, to clear their inventory of cars that don’t meet new stricter emission standards. 18 provinces and regions -- which together account for most of China’s car sales -- require vehicles to meet the new criteria as of July 1.