Coronavirus might drive away 2 million car sales in China even with recovery
TOKYO, NNA – Sales of new passenger vehicles in China plunged 43.6 percent to 1.83 million units during the first two months when the country was battling hard with the deadly coronavirus outbreak.
The steep fall from the same period in 2019 was reported by the China Association of Automobile Manufacturers.
The country's National Passenger Cars Association further warned that the crisis might wipe out car sales by two million units or 9.3 percent for the whole year in the world’s largest automobile market, dipping below 20 million units threshold.
Last year, sales of passenger cars, which account for over 80 percent of the total, fell 9.6 percent on year to 21.444 million units due mainly to sluggish sales of sedans.
The sales was also dragged down by stricter emission standards and cuts in subsidies for eco-friendly vehicles amid tepid consumer sentiment due to the lingering trade dispute with the United States.
In its report, the car dealers association made the forecast based on the scenario that the country could keep the crisis well under control by April and normalize car production and logistics. If this is achieved, the domestic automobile market would fully recover in the second half of this year, it reckoned.
However, if the virus becomes resurgent in another outbreak and inflow of Covid-19 infected people is not properly contained later in the year, car sales could crash further with a double-digit fall, said the association.
The National Passenger Cars Association, which is an arm of the China Automobile Dealers Association, also called on the government to offer stimulus packages to spur demand such as tax reduction and subsidies on car purchase as well as to ease rules in issuing license plates.
It noted that corporate activities, especially those of small and medium enterprises (SMEs), have been severely hit with nearly 40 percent of them cutting jobs and pay and suspending production.
This has dampened purchasing power, particularly that of first-time buyers, said the Shanghai-based body whose members are 141 car makers and dealers.