China offers incentives and money to consumers to help the world’s largest automotive market emerge from the pandemic crisis. In a normal year, 6 million new cars would have already sold in the People’s Republic. Instead, the American CNN network points out in a long report, this year the market stopped at 3.7 million units sold. The slump in sales hit 42% in the first quarter compared to the same period in 2019, according to data from the China Association of Automobile Manufacturers (CAAM).
Beijing has already announced the extension of subsidies for another two years and discounts for new “green”, electric or plug-in hybrid vehicles. Incentives that the government began to eliminate last year, but which now seem more necessary than ever: electric vehicles are in fact the ones that suffered the most due to the contraction of the market, only 53,000 cars were sold last month (excluding Tesla ), with a 53% drop compared to 2019.
Local governments are also intervening massively. Several provinces and cities encourage car purchases, primarily with cash subsidies of up to $ 1,400 per vehicle.
The automotive industry is involved directly or indirectly over 40 million Chinese workers and generates more than $ 1 trillion in revenue annually, about 10% of national manufacturing production. The crisis does not only involve local producers or companies that depend on Chinese groups (see Volvo bought by the giant Geely), but also foreign companies such as Volkswagen or General Motors which sell millions of cars here, about 40% of their global sales .
The lockdown is over even in Wuhan, the coronavirus epicenter, the car assembly lines in China have resumed work at full speed, after 76 days of total blockade. (In the photo, workers in the Wuhan Honda plant). Consumption, however, is still stuck. The demand had already slowed down in the pre-Covid era: in 2019 sales had fallen by 8% compared to 2018, the year in which the first drop of 3% was recorded after two decades of boom. The industry association, CAAM, is not unbalanced in forecasting for the rest of the year, but is not optimistic. Before the epidemic, it predicted a drop of 2% in 2020. According to an analysis by Standard & Poor, it will reach 10%.
April 14, 2020 (change April 15, 2020 | 11:49 am)
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