Car sales in China had dropped by a massive 79 percent in February, prompting car manufacturers in the country to call for the government's support to help alleviate financial pressures. The industry-wide sales slump marks the steepest monthly decline in the world's largest car market amid the ongoing coronavirus outbreak.
According to the China Association of Automobile Manufacturers (CAAM), automakers are calling for several measures for the government to implement to alleviate pressures and increase sales. The list of measures includes possible cutting purchase taxes on small vehicles, support sales programs in rural areas, and the postponement of new car emission standards.
The fall in the country's car sales last month marks the 20th straight month of decline. Overall, carmakers only sold around 310,000 vehicles. CAAM senior official, Chen Shihua, pointed out that the industry has not seen such low levels since 2005.
Automakers believe that measures such as the easing of purchase taxes and purchase restrictions are reasonable enough given the current predicament of the industry. These measures are expected to have an immediate impact on the industry, particularly for smaller players. If the measures are imposed, it could save a lot of companies from going under and in turn save a lot of jobs.
Some carmakers, which had slowly shifted to new energy vehicles, are asking the government to extend subsidies for battery-electric cars. Overall new energy vehicle sales in China have continually declined over the eight months following the rollback of government subsidies.
CAAM stated that a worthwhile investment for the government to boost the industry and the economy as a whole would be to extend previous subsidies for new energy vehicles and ease restrictions for their purchase in major Chinese cities. The association is also calling on the government to expand investments into infrastructures for new energy vehicles, including putting up more charging stations around the country.
Apart from the policies, the association is also calling on the government to provide logistics and support to help companies resume production. This includes support for facilities in Hubei, where around 10 percent of the country's total vehicle output is located.
Despite the drastic drop in February, CAAM believes that sales should rebound in March and the coming months. The association previously predicted that car sales will drop during the first half of the year due to the epidemic. However, sales numbers should recover after the outbreak in China contained. For the entire year, the association forecasts that car sales will shrink by around 5 percent.
