Last March, almost every country in the world went on different levels of quarantines and lockdowns. With this came a down surge in the sales of global vehicles, which was already anticipated. Markets and companies from various parts of the world confirmed how they were affected. They tracked the increasing severity with the hope that soon, the COVID-19 crisis will subside.
Currently, China’s daily life is slowly reaching near-normal, with automotive factories prudently starting their manufacturing operations. Consumers have been gradually revisiting the showrooms, although car dealers still experience inventory shortages. Honda Wuhan is working overtime to resolve this shortage. The China Association of Automobile Manufacturers reported that there was a 42% decline in the first quarter of 2020, with 80% of the drop happening in February. On the whole, the automotive market in China remains fragile and struggling, with just 1.3 million vehicles sold last March, a 46% decrease compared to March of last year. Usually, if the world were COVID-free, the Chinese car market would have sold over 6 million vehicles only for the first quarter; now it is only 3.6 million.
As automobile manufacturers are slowly picking up on their operations, increasing demand is one of the most critical priorities. The Chinese government is currently offering cash incentives to encourage demand and to support the car business in its slow recovery. Some cities are also providing cash subsidiaries per vehicle sold.
In early April, Beijing declared that it was extending its tax breaks and subsidies for NEVs or New Energy Vehicles for two years. It is clear now that these types of vehicles are more affected compared to other markets. Only 53,000 of these were sold in March, which is less than half of the usual sales made last year. This report excludes Tesla, however, as the company is striving to provide what is necessary to its Chinese car consumers; thus, there is some kind of replacement effect. At any rate, while the car industry can rebound anytime in the second quarter this year, it is also doubtful if it could sustain or make up for its previous losses. Analysts agree that China’s declining car sales in 2020 will be nearing double digits.
Care sales in America for the past month has expectedly dropped by almost 40% – approximately one million units, which is the lowest for March since ten years ago. For this reason, car production ceased in mid-March. Chevrolet acquired the most significant loss in terms of volume, and this was followed by Nissan, Toyota, and Honda, declining by more than 60,000 units. Most states in the country, however, reported that sales during the first week of March were slightly normal. Perhaps, according to analysts, these figures may not have been accurately pictured the full impact of the coronavirus outbreak. They continued to say that April and May will probably be the same considering the extension of lockdowns. They anticipate a loss of automobile sales to almost 14 million units for the whole year.
The COVID-19 crisis in Europe remains to be dangerous. France and Spain were among the first countries to announce a lockdown, which led to automobile sales, dropping to nearly 70% per market. In Germany, the country that previously acquired the largest car sales, the drop was seen at almost 40%. On the other hand, March is usually the strongest selling month for the United Kingdom, with the most number of plates registered. But this year, SUV and other passenger car sales decreased to a whopping 45%. Last but not least, Western Europe figures, in general, showed a decline of more than 50% car sales.
This is probably one of the very few places in the world where news is not very bleak in terms of car sales. South Korea’s local car industry that includes Hyundai, GM Korea, Kia, SsangYong, and Renault-Samsung, went back up to almost 10% in the month of March, rebounding from its large loses in February, with a20% decline due to automobile manufacturers shutting down.