In a normal year, China would have sold more than 6 million new cars by now. This year, the number is closer to 3.7 million, and now the government is handing out cash to help the world's biggest auto market get back on its feet.
Car sales declined 42% in the first quarter of 2020 compared to last year, according to data released late last week by the China Association of Automobile Manufacturers . While that is largely because of a whopping 79% plunge in February — when the country of 1.4 billion people recorded just 310,000 sales — the market remains very weak. Only 1.43 million vehicles were sold in China last month, a 43% decline over March 2019.China boasts massive car and aviation markets.
said in a statement Friday that as automakers restart production, boosting sales is now the industry's"primary issue" and an"urgent need."While the car market may rebound in the second quarter, it's unlikely that China will be able to make up for its losses in the first quarter, added.The industry association did not release a new forecast for sales this year. Before the outbreak, it predicted a 2% drop in 2020. Recent independent estimates, though, have been severe: China's auto sales could decline by as much as 10% this year, according to an analysis S&P Ratings published last week.China is taking steps to try to shore up sales.
Secretary General Cui Dongshu also noted earlier this month that China's Labor Day holiday in May will last five days this year, longer than it has been in more than a decade. He's hoping the desire to travel over a long holiday could boost sales.Less money to spare Handing out cash and hoping drivers return to the roads, though, isn't going to be enough to save China's sagging car market. The explosive sales growth that defined China's car market in the 1990s is long gone.
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