After several decades of enormous growth, China's auto sector has been facing a free fall for some time now, due to new gas emission standards, a drop in customer demand due to new tariffs and an economic slowdown.
The outbreak of the coronavirus, which originated in Wuhan, China, further deepened the slump in demand in the world's largest auto market.
According to the China Association of Automobile Manufacturers (CAAM), auto sales shrank 43 percent from a year earlier to 1.43 million units sold in March. While March marked the 21st consecutive month of decline, it was not as severe in percentage terms as February, which saw sales drop 80 percent from a year earlier.
Thanks in part to the coronavirus outbreak and severe lockdowns, manufacturers in China experienced their worst-ever quarter from January to March, with sales falling 42 percent from a year earlier to 3.7 million vehicles.
Free-falling market, March sales offer hope
China's auto market has been in decline since July 2018 due to tightening emission measures, trade tensions, the rise of hybrid platforms and the economic slowdown. Above all, the end of subsidies for electric cars in 2019 has appeared to be a "setback" on the country's ambitious goal, which aims to have environmentally friendly cars up to 60 percent of total sales by 2035. The massive shutdown of of the state due to COVID-19 has further jeopardized economic activities and demand for automobiles.
As the pandemic severely reduced demand, March sales continued to decline, but at a slower pace. Electric vehicle sales fell for the ninth consecutive month in March, with 53 units sold (excluding Tesla sales), according to CAAM.
However, the decline was less profound than a month earlier, where sales of electric cars in China fell 77 percent from a year earlier, with 11 units sold. In fact, data from the sale of these automobiles in March gives a glimmer of hope for a comeback, officials said... (Read more in Koha Ditore. Register for free)