Ye Shengji, deputy secretary general of the China Association of Automobile Manufacturers (CAAM), has stated that the outbreak of the coronavirus will exert a huge impact on the Chinese auto industry’s performance in the first quarter of this year. He said that auto output and sales in China in the first quarter will likely decrease by 45 percent year on year and decline by around 25 percent year on year in the first half of the year, if the coronavirus can be controlled effectively by the end of March.
The auto industry is an important pillar industry of China’s economy, of which the total retail sales, the relevant taxes on automobiles and the industry’s employees account for about 10 percent of the country’s total retail sales, total tax revenues and total urban employment.
China’s auto output recorded its first year-on-year decline in 2018, while the decline gained momentum in 2019, resulting in decreases in the auto industry’s profitability.
“Facing the sudden outbreak of the coronavirus, the performance of the auto industry was worse in the first two months of 2020,” said Ye Shengji, adding that the industry faces unprecedented downward pressure in the current year
Mr. Ye said he thinks that postponed demand will be released within a short period after the coronavirus, which will boost the consumption of automobiles. However, middle-to-low income citizens will see decreases in their incomes, which will exert a negative impact on the auto industry. Therefore, he said, the overall situation for the auto industry is not optimistic, while it is expected to worsen first and then to improve later in the year.
Ye Shengji also suggested that China should issue policies to stimulate the demand for automobiles.