The world’s automotive industry has endured a tough test during the coronavirus pandemic, but China has emerged from the sales decline in May, officials said at the China Auto Chongqing Summit on June 13. Wang Xia, Chairman of the Automotive Industry Committee of China Council for the Promotion of International Trade (CCPIT), said the pandemic has brought alarming damage to the auto industry across the globe. Some global automakers had to reduce production, cut wages and jobs, and even withdraw from the Chinese market. Statistics show that China produced 7.79 million and sold 7.96 million vehicles in the first five months of 2020, down 24.1% and 22.6% year-on-year respectively. More than 1,000 dealers applied for bankruptcy and some small car companies might not be able to recover from the outbreak.

Despite the heavy losses, China’s car market has started revving up again, Wang said. In May, sales increased 5.9% compared from April and 14.5% year-on-year. A total of 2.19 million vehicles were sold last month, including 1.67 million passenger vehicles, up 7% from the same month last year. Carmakers are revving up production as well. The 2.19 million vehicles made in May represented an increase of 18.2% from the same month last year. The CAAM said that the 23 carmakers’ 204 plants across the country had all resumed operations.

“The long-lost double-digit growth showed that vehicle purchase demand is steadily releasing and the impact of the pandemic is ending,” Wang said. Last month, vehicle exports declined 36% and the import of automobile components decreased 24% compared with same period last year. Among the world’s four largest auto markets – China, the United States, Germany and Japan – only China achieved a negative-to-positive reversal. Recovery in the overseas car markets will still take some time, Wang said. In May, premium vehicle sales increased more than 20% year-on-year, while the demand of vehicles under CNY80,000 remained low.

More people in China are showing an interest in owning a car as the Covid-19 pandemic is brought under control. In a survey of 1,000 people in April by UBS Evidence Lab, 27% of respondents said the pandemic has made them more willing to buy a car. That is 10 percentage points higher than a survey of 1,000 people UBS surveyed in February, when the pandemic was at its peak in the country.

Some carmakers have released their May sales. FAW-Volkswagen topped the list of carmakers in China in May. It sold 186,777 vehicles under its Volkswagen, Audi and Jetta brands, up 22% year-on-year. GAC Toyota had its best-ever monthly sales in May, with 68,518 sold, up 32% year-on-year. Sino-U.S. joint venture SAIC-GM-Wuling sold 120,000 vehicles during the month, up 11% year-on-year. Changan Ford, another Sino-U.S. partnership, delivered 23,491 units in May, up 130% from the same month in 2019 and up 31.4% from April. Japanese carmaker Nissan sold 130,016 vehicles in China in May, up 6.7% year-on-year. Chinese electric car startup Nio sold a record high of 3,436 vehicles in May, up 215.5% year-on-year. “We expect to achieve our delivery goal for the second quarter of 2020, while continuously improving the gross margin and narrowing the operating loss,” said Nio Chief Financial Officer Steven Feng.

Vehicle sales for 2020 are likely to see a slide in the single digits instead of double digits as many organizations had estimated. In terms of China’s new energy vehicle initiative, UBS said the pandemic will have little effect. “In China, which has now experienced a rapid ‘v-shaped’ rebound during April and May of 2020, we expect to end the year with a 9% decline in sales for 2020,” said Shiv Shivaraman, AlixPartners Local Market Leader for Greater China. But he added that he does not expect China’s auto sales to return to the peak of 2017 before 2025. The company’s global sales forecast for 2020 is what the firm calls a “mixed-speed recovery”, with China recovering the fastest, to 22.5 million units; followed by the US, at 13.6 million; and Europe, at just 14.1 million.

Sales in the commercial vehicle sector also rebounded. In May, sales totaled 520,000, up 48% year-on-year as workers returned to their offices. Total sales in the first five months reached 1.85 million, down 1% year-on-year. The new energy vehicle sector is yet to turn positive. A total of 84,000 units were sold in May, still a 25.8% fall from the same month in 2019. Sales from January to May were 295,000, a 40% nosedive year-on-year, the China Daily reports.

China’s vehicle exports remained at a lower level as merely 49,000 vehicles were sold in May, down 37.4% year-on-year. From January to May, vehicle exports totaled 323,000, falling 17.5% year-on-year.