The coronavirus epidemic in China put the clamps on new vehicle sales in the country with auto companies seeing an 80% decline in February.
The China Passenger Car Association (CPCA) didn’t offer up final sales numbers, but the 80% slide was a slight improvement over the mid-February numbers that saw sales down 92%. Sales were down 18.7% in January, when the virus first began to spread.
“Dealers returned to work gradually in the first three weeks of February and their showroom traffic is very low,” CPCA said, adding February’s sales drop will likely be the worst of the year.
Sales fell to an average of 7,100 vehicles a day compared with about 45,000 units per day last February. On the brighter side, average daily sales improved toward the end of the month, to around 16,000 units per day in the fourth week from 811 units per day early in the month.
Passenger car sales in China fell almost 41% through the first two months of 2020, reflecting the largest sales decline in two decades.
When the mid-month results rolled out, some local government began offering subsidies, hoping to entice buyers back into dealerships and jump start sales. It’s unclear what the impact of those offers were on the final monthly tallies.
The city of Guangzhou expects to reintroduce incentives for electric vehicles, Reuters reported. The city, located in the south of the country, is home to Toyota, Honda and Nissan joint ventures with Chinese partners.
Foshan, near Guangzhou, is home to a venture between Volkswagen and FAW Group, moved early, announcing last month that it would offer cash of 2,000 yuan for purchases of new cars and 3,000 yuan for replacement of existing cars.
Foshan’s government said it will also offer subsidies to help offset the marketing expenses of auto companies. Xiangtan, in the southern province of Hunan, is offer potential buyers 3,000 yuan ($429) in cash if they buy a car made locally by Geely, state media Hunan Daily reported on Sunday.
The first automaker to reveal its results in China, Toyota said it sold 23,800 Toyota and premium Lexus cars last month, down by 70% from a year earlier, according to Reuters.
General Motors China president Matt Tsien said in a post on GM’s official WeChat account that the industry will face “serious challenges” in the first quarter this year, but he expects things to improve in the second quarter.
Car sales in China, the world’s biggest car market, have been falling for the past two years, with an 8.2% slide last year. This year’s results were supposed to be improved, but the impact of the outbreak is definitely causing a revision of forecasts. Initially expected to drop 2% in 2020, the new forecasts are predicting about 4.4%.