China's car market under pressure in May and June after pent-up demand released in April

Source:Global Times Published: 2020/5/11 12:43:40

A worker disinfects the factory of Chang'an Automobile in Dingzhou, north China's Hebei Province, February 16, 2020. Companies in Dingzhou resumed production with epidemic prevention measures during the outbreak of the novel coronavirus. (Xinhua/Zhu Xudong)

Pressure will linger in China's car market in May and June despite warming signs in April, as government stimulus is still muted and people are uncertain about their economic prospects under the shadow of the COVID-19 pandemic, car expects and an industry association noted. 

According to the China Automobile Dealers Association, car sales largely rebounded in April as a result of demand stored in February and March. However, such demand may not extend to later months, meaning the car market will still be under great pressure in May and June. 

Zeng Zhiling, an analyst at Shanghai-based consultancy LMC Automotive, said that prospects are gloomy for the global economy and trade this year as a result of the coronavirus, which will also dampen people's expectations for the Chinese economy this year. 

"Some customers might delay their car purchase plans as they worry about the job market and general economy this year," Zeng told the Global Times. 

He also noted that China's policy stimulus for the car market remains muted in general, although some local governments have rolled out policies to stimulate car consumption. 

China's passenger vehicle sales sank by 5.6 percent on a yearly basis to 1.43 million in April, according to data released by the China Passenger Car Association. That was a great improvement compared to a shocking 48.4 percent decline in March and 81.7 percent in February. 

Despite the pressure, Zeng predicted car sales will not plummet in May and June.

"There are also certain positive factors. Some people might choose to purchase private cars as they consider them safer (from the virus) than public transportation," he said. 

Zeng predicted that China might have a car sales slump in May and June compared to April, and sales growth will likely to occur in the third quarter. 



Posted in: ECONOMY

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