Vehicle market in China recovering from coronavirus pandemic blow

Date: 16 Jun 2020

The world's automotive industry has endured a tough test during the coronavirus pandemic, but China has emerged from the sales decline in May, officials said at the China Auto Chongqing Summit on Jun 13.

Wang Xia, chairman of the automotive industry committee of China Council for the Promotion of International Trade, said the pandemic has brought alarming damage to the auto industry across the globe.

Some global automakers had to reduce production, cut wages and jobs, and even withdraw from Chinese market.

Statistics show that China produced 7.79 million and sold 7.96 million vehicles in the first five months of 2020, down 24.1 and 22.6 percent year-on-year respectively.

More than 1,000 dealers applied for bankruptcy and some small car companies might not be able to recover from the outbreak.

Despite the heavy losses, China's car market has started revving up again, Wang said.

In May, sales increased 5.9 percent compared from April and 14.5 percent year-on-year.

"The long-lost double-digit growth showed that vehicle purchase demand is steadily releasing and the impact of the pandemic is ending," Wang said. Last month, vehicle exports declined 36 percent and the import of automobile components decreased 24 percent compared with same period last year.

And among the world's four largest auto markets-China, the United States, Germany and Japan, only China achieved a negative-to-positive reversal. Recovery in the overseas car markets will still take some time, Wang said.

The central government released a series of strategic measures for economic revitalization and the local governments have taken measures to boost car consumption, both of which are expected to mitigate the adverse effect of the pandemic.

Wang said that the deep impact of the pandemic on the auto industry should be understood.

The pandemic affects customers' requirements of the auto industry. In May, the premium vehicle sales increased more than 20 percent year-on-year, while the demand of vehicles under 80,000 yuan ($11,299) remained low.

"It shows people's pursuit of health, safety and quality of life," Wang said. "It can be argued that the pandemic pressed the conversion key of consumption upgrade and opened a new space of product quality and brand upgrade."

Chinese auto groups faced fiercer competition and sought opportunities to grow.

Xu Heyi, chairman of BAIC Group, said Chinese auto brands have comprehensive strength to compete with foreign brands in technology application, product quality and other aspects. The restructuring of the global auto industry has increased significantly and more resources will shift to China in the future.

He said that China is in the forefront of the global new energy transformation and equipped with the world's most mature new energy vehicle industry chain. With unique policy support, consumer groups with good acceptance of technologies and complete internet industry ecology, the country creates the optimal foundation for the development of intelligent network and autonomous driving.

Wu Song, deputy general manager of GAC Group, also believes that Chinese auto groups have opportunities to win in the intelligent new energy vehicle sector.

Chinese auto companies should promote product quality, strengthen brand building and promote independent innovation, Wu said.

Source: The China Internet Information Center

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