China’s car market drops 79% but salvation seen as lockdowns eases


    COVID-19 shattered China’s industry with sales dropping 79% compared to the same month last year.

    China is currently the world’s biggest automotive market both in manufacturing and in sales, with practically all of the car brands present. Auto executives from Mercedes-Benz and Volswagen AG are confident that the industry will gradually recover and remain stable for a long period despite short-term pressure from the coronavirus epidemic.

    After restrictions on social life were eased car dealerships were reopened but sales has not yet picked up. However, even before the pandemic, the National Development and Reform Commission said in a regular industry news conference that China’s March passenger car sales was already down 40.8% year-on-year.

    A Honda car at the Dong Feng Assembly plant in China on hold at the line. (Photo from CAAM)

    Cai Ronghua, a senior official of the NDRC said that the broader impact will mean a further downturn in the sector.

    “If auto production and sales continue to decline, it will not only affect the industry itself, but also affect the resumption of production in other industries, and may even affect the smooth operation of the entire economy,” Cai told Reuters, adding auto production stopped but had not yet been affected by global auto parts supply disruption.

    Volkswagen, the world’s largest carmaker and China’s best-selling manufacturer, said showroom traffic during the last weekend of March had rebounded to year-earlier levels after its dealerships re-opened as measures to contain the pandemic were eased.

    “Our dealerships are seeing customers on the showroom floors once again. There are growing signs of recovery, with a good chance that the Chinese car market could reach last year’s level in early summer,” Volkswagen Group China CEO Stephan Wöllenstein told Reuters.

    Daimler, which owns the Mercedes-Benz brand, said that China’s demand had recovered to near pre-crisis levels and its factory in Beijing had resumed production running a two-shift system.

    “In China and South Korea our dealerships are fully open and we see a significant increase in demand there. That gives us confidence,” Daimler board member Britta Seeger said adding that the company wants to resume production at its German plants in Untertuerkheim, Hamburg und Berlin on April 20, followed by a ramp-up at its plants in Sindelfingen und Bremen. – with reports from Reuters, China Association of Automobile Manufacturers, NDRC of China


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