China’s car sales down 92% in first half of February
February 25, 2020 Category China News Round-up, Weekly
The China Passenger Car Association (CPCA) said “barely anybody” had looked to buy vehicles in the first half of February. Most dealerships have remained closed as a precaution. The plummeting domestic sales – down 96% in the first week of February and 92% across the first half of the month – come days after Jaguar Land Rover revealed it was currently making no sales in China. “There was barely anybody at car dealers in the first week of February as most people stayed at home,” said Cui Dongshu, Secretary General of the CPCA. “Very few dealerships opened in the first weeks of February and they have had very little customer traffic.” Only 4,909 cars were sold in the first 16 days of the month, down from 59,930 in the same period last year, in a market where more than 25 million cars were sold in 2019.
On February 21 the Japanese carmakers Nissan and Honda further delayed restarting their manufacturing plants near the center of the coronavirus outbreak in China until at least March 11 after the latest government directive to contain the virus spread. The shutdown in China has disrupted the global supply chain as carmakers struggle to source the tens of thousands of parts needed for each car. Last week, Ralf Speth, Chief Executive of Jaguar Land Rover, said the company had been forced to fly parts in suitcases from China to the UK as supplies continued to dwindle. Fiat Chrysler has warned it could halt production at one of its four European plants if the supply from China continues to be affected. Toyota and Peugeot-Citroen said their supply chains may be affected but neither expected to close UK plants as a result, the South China Morning Post reports.
The China Daily adds that measures will be taken to boost car sales. In Foshan, Guangdong province, local residents that order a vehicle after March 1 can get a subsidy of up to CNY5,000. The Guangdong provincial government also asked the cities of Guangzhou and Shenzhen to ease their license plate quotas. According to a survey by the China Auto Dealers Association of 4,661 dealerships, only around 12% have resumed business as of last week. The CAAM said vehicle sales will slide at least 10% in the first half of the year and around 5% for the entire year if the epidemic is effectively contained before April. The Association has suggested postponing the nationwide adoption of State VI emissions standards to 2021. Meanwhile, over half of the auto companies in China resumed production. Foreign auto and auto parts makers like Honda, Nissan, General Motors and Renault, operating in Wuhan each may suffer CNY40 million in losses a day due to the production pause amid the coronavirus outbreak, industry insiders told the Global Times.
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