The spread of coronavirus in China does not only cause fear among people around the world, but also has impacts on automotive industry as seen in car sales. The Republic of China, being the biggest automotive market in the world, only booked less than 2 million units of car sold in January 2020.
According to China Passenger Car Association (CPCA), the current condition hits hard on the Chinese car market. Car sales in January 2020 only booked 1.94 million units, dropped 18% compared to last year’s figures.
The first 16 days of this February only saw 4,909 car units sold, a considerable drop from last year of the same period that reached 59,930 units. The association stated that Covid-19 will bring a big surprise for the car industry.
“There were only very few dealer networks operating in the first weeks of February, and prospective buyers were also disappearing,” CPCA wrote.
CPCA estimated that the impact will be worse than SARS 2003 epidemic came. Car sales growth in China slowed down to 13% in April and 8% in May 2003 when the virus attacked.
This coronavirus has also been disrupting automotive supply chain in China as a lot of car manufacturers stop operating for weeks. Experts are concerned that car manufacturers around the world may also halt production if spare part suppliers in China also hit the pause button.
Car sales in China in the first quarter is predicted to drop by 10 percent compared to last year of the same period, while in the figure is estimated to decrease by 5 percent during 2020. The prediction would materialize as long as the coronavirus spread could been limited before April.
One way to overcome car sales issue is to hold auto exhibitions such as the Beijing Autoshow, which is always held in April every year. But with the coronavirus, the organizers of the event have announced that they will postpone this biggest automotive event in the world. The organizers said they would postpone the Beijing Autoshow indefinitely due to the virus.
Beijing Autoshow is often the place for the World Premier of the world's automotive manufacturers since China is one of the largest automotive markets in the world today. Chinese and also global manufacturers scramble to be able to introduce their products for the first time to the world at the event.
Even so, the Chinese automotive industry will certainly prepare a strategy to keep the 2020 market from falling far from the previous year. In 2019, China managed to market 25 million vehicles. To handle the under-performing market at the beginning of this year, the brand holders will introduce several new models as a market stimulus.
In addition to the plunging car sales, the virus also affected the automotive industry itself. For more details, read “The Impact of the Coronavirus on Chinese and World Automotive Industry.”