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CAAM: China Feb auto sales free fall amid COVID-19

As market had expected, both China’s auto sales and production slumped in February as the COVID-19 hit China’s economy and many industrial sectors hard, and the sales fell 79.1% on year and the production decreased 79.8% on year, the latest release from the China Association of Automobile Manufacturers (CAAM) on March 12 confirmed the dismal.
The February auto sales and production were both down 83.9% on month too, with the former reaching 310,000 units and the latter 285,000 units, and for the first two months, total sales declined 42% on year to 2.24 million units and the output lost 45.8% on year to 2.04 million units, according to the statistics.

New-energy vehicles (NEV) had not been spared from the blow either in February, as its sales dropped 75.2% on year to 12,908 units, production eased 82.9% on year to 9,951 units, and its total sales over January-February reached 59,705 units, down 59.5% on year, and production declined 63.8% on year to 53,840 units, according to CAAM’s data.

“China’s auto manufacturers have restarted operations but at a slow pace, coupled with the unstable spare parts supply, production had been very low, and at the same time, demand came to a standstill, and the influence is expected to be severe and may last for the rest of the first half,” CAAM warned in the release.

An official from an auto component producer in Northeast China’s Liaoning province confirmed that auto makers’ production is still feeling the impact from the virus outbreak, though their production has not been affected as much due to comparatively fewer COVID-19 cases locally.

“We supply components to a car producer in Jiangxi (East China), and it has placed some orders with us recently but not confirmed the delivery date, as the supply of other spare parts from other suppliers has not been secured,” he said.

An official from a Shanghai-based car producer shared the view. “Car dealer have returned to work relatively early, but walk-in customers are really very few and spare parts stocks are low at shops,” he stated.

Xu Haidong, CAAM’s deputy secretary general was quoted by a Chinese media on March 13, warning that the epidemic may dent China’s auto industry for the whole 2020. 

“The full-year market outlook remains unclear, and under the current situation, auto sales may decline more sharply than the originally-expected 2% on year for 2020,” he said.

China’s demand for cars, however, has not disappeared but has been detained by the virus outbreak, CAAM emphasized in a sharing on March 10, as Chinese citizens have been staying away from crowds, shopping malls, and car showhouses to minimize chances of virus infection, and if the virus can be under control by the end of April, there will be an obvious rebound in car sales in May, though the recoveries, if any, will be tiny for March and April.

Written by Anna Wu, wub@mysteel.com
Edited by Hongmei Li, li.hongmei@mysteel.com