Chinese autos group estimates sales skidded 48% lower in April

Shanghai, May 6 (BUS): The Automobile Association of China estimates that sales in April were down 48% year-on-year, as COVID-19 virus-free policies closed factories, restricted traffic to showrooms and capped spending.

That estimate represents the biggest drop in sales for the world’s largest auto market since February 2020, near the start of the pandemic, when sales fell 79% from a year earlier, Reuters reported.

The China Association of Automobile Manufacturers said on Friday that car sales in the first four months of the year could drop 12.3% from a year earlier.

The sharp drop is the latest sign of the economic costs of emergency measures imposed by China to control the outbreak of the Corona virus in Shanghai and other cities in recent weeks, and comes as manufacturers struggle to resume production.

The overall sales estimate was also lower than the previous estimate based on retail sales for the first three weeks of April.

The China Passenger Car Association estimated that retail shipments of passenger cars in China were 39% lower in the first three weeks of April than a year earlier.

Showrooms, stores and malls in Shanghai were closed for the month and its 25 million residents were unable to shop online for much food and daily necessities.

Analysts at Nomura estimated in mid-April that 45 cities, representing 40% of China’s GDP, were under full or partial lockdown, with the risk of recession growing.

A survey by the China Automobile Dealers Association showed that showrooms in 34 cities were closed by COVID-19 control measures in April, most of them for more than a week.

Before Shanghai closed, sales of electric cars were booming. Tesla’s sales in China jumped 56% in the first quarter, while sales of electric cars jumped from its biggest competitor in China, BYD (002594.SZ), has multiplied five times.

Earlier this week, three of China’s leading electric car makers reported a sharp drop in sales.

Xpeng Inc (9868.HKand NIO Inc.9866.HKand Li Auto Inc.2015.HK) fell 41.6%, 49% and 62%, respectively, in April versus March, data from companies showed.

SAIC Motor Co. (600104.SS), China’s largest automaker by sales and a partner with Volkswagen and General Motors, reported a 60% drop in its sales in April.

Tesla (TSLA.O) has indicated it aims to increase production at its Shanghai plant to pre-closure levels by May 16, according to an internal memo seen by Reuters.

One of the most notable consequences of Chia’s measures to control the latest outbreak of COVID-19, the largest to date, has been the disruption of the Tesla plant, with strict controls.

However, Tesla’s advance comes as a survey shows Japanese companies are struggling to reopen factories in Shanghai, pointing to problems with the municipal government’s push to help key businesses get back to work.

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