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Car sales in China down dramatically as coronavirus disrupts production & supply

Car sales in China down dramatically as coronavirus disrupts production & supply
The world’s largest auto market, China, has suffered its biggest monthly drop in passenger car sales as the country battles with the coronavirus outbreak, which has disrupted production and supply chains.

New auto sales fell by 80 percent year-on-year in February, according to preliminary data published by the China Passenger Car Association (CPCA) and cited by media. Although the organization didn’t reveal the exact number of vehicles sold across the country, it expects that February’s could be the steepest drop of this year.

Also on rt.com Global carmakers lose nearly $6 million daily for each plant shut down in Wuhan – media

The recent data is miraculously better, compared to previously released dramatic figures, which revealed that car sales had plunged 92 percent in the first two weeks of February. The CPCA report noted that by the third week around 50 percent of the showrooms, that remained shut as part of the prevention measures, had resumed operation and 70 percent had reopened their doors by the month’s end.

Not only did the dealerships remain empty last month as both workers and clients had to stay at home, but car factories were also closed, which is likely to have an impact on the supply of new vehicles.

China hosts the production facilities of many foreign auto majors and their parts suppliers, including Japan’s Toyota and Honda, US’ General Motors and electric carmaker Tesla, as well as France’s Renault, among others. Some of their plants are in the city of Wuhan, one of China's major auto hubs and the epicenter of the deadly Covid-19 epidemic.

Due to the quarantine measures, some brands have been trying to boost online sales, while local authorities are attempting to stimulate the auto market after President Xi Jinping urged them to address the situation. For example, car buyers can get up to 3,000-yuan ($430) rebates in the city of Foshan.

China is the world’s biggest car market, with more than 21 million vehicles purchased in the country last year, according to Statista website. The deadly epidemic has become another blow to an already slowing auto market, which in 2018 saw its first drop in more than 20 years.

For more stories on economy & finance visit RT's business section

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